Two companies — Foodstuffs (Pak'nSave, New World, Four Square) and Woolworths NZ (formerly Countdown) — control roughly 82% of New Zealand's grocery market, a duopoly that watchdogs say keeps prices high, suppliers squeezed and new rivals out. After a landmark Commerce Commission market study, a Grocery Commissioner and a strengthened Grocery Supply Code, food prices keep climbing and the structure of the market has barely shifted, making groceries one of the most persistent cost-of-living flashpoints in the country.

What's happening:

• The Commerce Commission's 2022 market study concluded the two chains earned about $1 million a day in excess profits due to weak competition, and recommended a wholesale-access regime, a supply code, a ban on restrictive land covenants, mandatory unit pricing and a dedicated regulator.
• A first-ever Grocery Commissioner, Pierre van Heerden, was appointed in July 2023 (five-year term from 13 July 2023) to police the sector under the Grocery Industry Competition Act 2023.
• The Commission's August 2025 annual report found the duopoly still holds about 82% of the market nationally — 71% in Auckland but up to 88–92% in smaller towns, the West Coast and upper South Island, where shoppers have little or no choice.
• A strengthened Grocery Supply Code 2025, made in October 2025 and in force from 1 May 2026, introduced a standalone retaliation ban, prohibited "investment buying" (where supermarkets profit from supplier-funded discounts without passing savings to shoppers), and tightened record-keeping requirements.
• In July 2025, Commissioner van Heerden warned Foodstuffs North Island for "likely breaching" the Supply Code's good-faith obligations after it obstructed a supplier request; 37% of FSNI's suppliers rated their interactions negative or very negative, compared with around 20% for Woolworths.
• Competition has barely moved: the Commission's June 2026 report found duopoly market share above 80% nationally, Foodstuffs ranked second internationally by EBIT (outperforming Coles, Walmart and Tesco), and Woolworths posting a 22.4% half-year EBIT rise.
• Consumer trust has collapsed — Commission data show trust in supermarkets fell from 43% in 2021 to 13% by 2026, while 18% of surveyed households reported food insufficiency.
• Stats NZ recorded annual food inflation of 4.6% to January 2026, driven by grocery items; the rate eased to 2.6% by April 2026 but remained above the general CPI.

Where the parties stand:

• Finance and Economic Growth Minister Nicola Willis (National) initially floated a forced break-up and commissioned external advice on structural separation. By August 2025 she pivoted to a market-facilitation approach — an express-lane fast-track consenting process for new entrants, Overseas Investment Act clarifications, and Commerce Act amendments on predatory pricing. A 2023 MBIE analysis warned that forced divestment could create a "$3.8 billion net cost over 20 years." By March 2026, with Tesco, Aldi and Lidl all declining the Request for Information, the government backed away from structural breakup and Willis acknowledged she can only "open my arms as wide as possible."
• NZ First has long pushed to break up the supermarket duopoly, arguing structural separation is the only credible fix.
• Te Pāti Māori ties grocery affordability to removing GST from food, arguing relief must reach low-income whānau directly.
• The Greens favour breaking up the duopoly and taxing excess profits. Commerce and Consumer Affairs Spokesperson Ricardo Menéndez March called the government's plan "one part of the puzzle" and said stronger action on greed is needed. The party puts cost-of-living affordability at the centre of its economic platform.
• Labour Finance Spokesperson Barbara Edmonds labelled the government's fast-track regime reasonable but said it would make no "immediate difference" for struggling New Zealanders and criticised ministers for "dithering" since the 2022 recommendations.
• Grocery Commissioner Pierre van Heerden has urged more time for reforms to bed in while continuing to push for a credible third retailer-wholesaler; Commerce Commission head Alice Hulme noted in June 2026 that there had "not been much improvement in competition for shoppers yet."
• Industry voices push back: Foodstuffs disputes the "excess profit" framing and warns a forced break-up would raise costs and risk investment. Consumer NZ CEO Jon Duffy countered that after "three years" little had moved and called the June 2026 findings "a clear sign that no progress was being made."

*Positions are summarised from public statements; readers should weigh competing claims about causes of high prices.*

What to watch:

• Whether a credible third national operator — Costco has signalled interest in more NZ stores; iwi organisations and Sir Stephen Tindall's ventures are also in discussion — actually commits and builds at scale.
• Whether the Grocery Supply Code 2025's new rules (in force from 1 May 2026) produce measurable improvements in supplier satisfaction and price competitiveness at shelf.
• Movement in the Stats NZ Food Price Index — sustained falls in grocery-line inflation would be the clearest real-world test.
• Whether the next government (election due late 2026) revisits structural separation or divestment legislation that this National-led coalition declined to pursue.