New and simpler pricing
We have delivered on our commitments made to simplify pricing and promotions at PAK’nSAVE and New World.
Moving away from promotions
Moving away from the historical mix of promotions by introducing more products at everyday low pricing (EDLP).
Electronic shelf ticketing
138 stores across the North Island currently have electronic shelf labels - and counting.
We are actively working on continuous improvements
In July 2022, we commenced changes to the way we do ticketing in our PAK’nSAVE stores to make it easier for our customers to find value and identify prices that will stay low, for longer. PAK’nSAVE now has three tickets. We have introduced a plain ‘regular ticket’ and reduced the number of prices called out as ‘Extra Low’ to make it clearer for customers to identify value for money. Prices called out as ‘Everyday Low’ now stay lower, for longer.
In August 2022, Everyday Low Price (EDLP) was introduced in all 148 New World stores nationwide to provide more certainty for customers at the checkout. To simplify our promotions we have phased out ‘Saver' tickets from New World Stores and now have four tickets with very clear propositions.
Plans are also underway to simplify theme week ticketing e.g., Meat Week.
|PAK'nSAVE (3 Price Tickets only)
Effective from July 2022
|New World (4 Price Tickets only)
Effective from January 2023
Regular = our regular low price
Regular = normal pricing
Everyday Low = a price that is kept lower for longer
|Everyday Low Price = low prices that last on 100s of items|
Extra Low = a price so hot it won't last
|Super Saver = meaningful discounts for a limited time|
|Club Deal = meaningful discounts for Clubcard members|
We're working to ensure our loyalty programme and data collection and user practices are clear and transparent.
Clubcard terms and conditions
Worked quickly to implement the proposed enhancements to New World Clubcard terms and conditions that we shared with the Commission. Communication of these updated terms to customers has now been completed.
|Programme||Qualifying spend (NZD)||Rewards earned||Conversion|
|Airpoints||$25||0.185||$150 = 1.11 Airpoints Dollar|
|Flybuys||$25||1||1 Flybuys earned = 1 Point
28 Flybuys earned = $5 New World Dollars
4 Flybuys earned = 3c off per litre up to 50L at Z and Caltex
We support mandatory industry-wide standards for unit pricing to help customers make accurate price comparisons. We engaged with MBIE and provided comprehensive submissions on the draft regulations for grocery products. The unit pricing regulations have now been finalised and came into force at the end of August 2023, however, there is a transitional period before compliance is mandatory.
We have already undertaken significant work to increase the proportion of our products showing unit pricing and are now working through the detail of the final regulations and are working to implement this instore and online within the transition period.
Price comparison services
We’ve reached out to each of the legitimate price comparison websites that we are aware of and have met with one party to date. We will look to assist where we can.
Being transparent on price changes and what’s driving them
We’re delivering on our commitment to being transparent and accountable on grocery price changes and the drivers behind them. In a first for NZ’s supermarket industry, and to support our work to get best value for New Zealanders, we engaged independent economic consultancy Infometrics to measure the change in the cost of grocery goods charged by suppliers to our cooperatives on a monthly basis, using Foodstuffs NZ real-time data across over 60,000 products. Our data and insights team are also tracking and comparing our price increases against Stats NZ’s Food Price Index (FPI) each month, so that customers have a full and transparent picture of food cost changes and what’s driving them.
Grocery Supplier Cost Index
The Infometrics - Foodstuffs New Zealand Grocery Supplier Cost Index shows sustained input cost pressures as suppliers continue to pass through the higher costs they are facing, with a 7.5%pa rise in July 2023. The Grocery Supplier Cost Index is published around the second week of each month.
How are we making sure there’s a level playing field for our competitors?
We are working to remove the genuine barriers to market entry that are within our control, including freeing up land for supermarket development and developing our wholesale service to qualifying wholesale customers.
Freeing up land for supermarket development
In August 2021, we committed to ending the use of restrictive land covenants and exclusivity provisions in leases, and immediately started a process to identify and remove all existing such clauses. While that process is underway no covenant or exclusivity provision has or will be enforced.
We have also supported the Commerce (Grocery Sector Covenants) Amendment Act 2022, which deems covenants unenforceable and will accelerate the process of their removal.
We’ve identified 55 restrictive covenants for removal. We have already removed 38 of them. That's about 69%. Our work to identify and remove any remaining restrictive covenants is an ongoing priority.
As at June 2023, we have removed restrictive covenants from 117 out of 192 affected titles. That’s about 61%. Over time, the total number of affected titles may change as a result of subdivisions or amalgamations by third parties.
100% of remaining covenants are registered against land that we no longer own. To remove these covenants, we are using the new unilateral process provided by Section 28B of the Commerce Act 1986 where possible. However, in some cases, we need co-operation from third parties. We have approached the owner of each parcel of land and are working with those owners who have responded.
Removing exclusivity arrangements
Process of reviewing and taking steps to proactively agree variations to leases to remove exclusivity arrangements is underway.
New property transactions
No longer including restrictive covenants or lease exclusivity provisions in new property transactions.
No land banking
Our co-operative does not land bank. All the land we invest in is to develop sites for future Foodstuffs stores at the right time for each community around the North Island.
Wholesale supply to qualifying wholesale customers
We understand the Government’s request that there be a competitive wholesale grocery market to support retail competition in NZ and are committed to being an active participant in that market. Several streams of work are well underway to develop a wholesale supply solution for non-member retailers. This infographic has been designed to show how the Foodstuffs co-ops currently operate, and how wholesale supply to qualifying wholesale customers fits in.
Wholesale access for qualifying wholesale customers
We now have three qualifying wholesale customers signed up to our new wholesale service.
Support recommendation to offer wholesale supply to competing grocery retailers and other qualifying wholesale customers on a voluntary basis.
Wholesale service to qualifying wholesale customers
We have a dedicated team working on developing our wholesale service. We have this up and running and are continuously making improvements to ensure we get it right. The three components of non-member wholesale supply are: understanding demand, assessing supply and negotiating terms.
Engaging with suppliers
Written to a large proportion of suppliers who distribute products via our Distribution Centres seeking their agreement to have their products included in a wholesale offer to qualifying wholesale customers outside of our co-op.
Standardised terms and conditions and transparent wholesale supply request rules
Work is underway to develop standardised terms and conditions for wholesale supply and wholesale supply request rules. These will all be finalised within the timeframes required by the Grocery Industry Competition Act.
How are we improving our relationships with suppliers?
We support the introduction of the Grocery Supply Code of Conduct, which gives clarity to the rules of engagement with supplier partners to drive better outcomes for customers.
Code of conduct
Grocery Supply Code of Conduct
We supported the introduction of the Grocery Supply Code, to give clarity to the framework of engagement with our supplier partners, and to drive better outcomes for consumers. Over recent months we have been working constructively with MBIE in relation to our submissions on the Code.
We are committed to working with the newly appointed Grocery Commissioner who will actively monitor and enforce Grocery Supply Code and Act compliance.
Additional training underway with our merchandising teams to comply with the Grocery Supply Code.
Engagement with suppliers
Monthly supplier forum held with suppliers and FSNI leadership team. A fortnightly update is also shared with suppliers via email.
On average we have 350 suppliers joining our monthly digital supplier forums.
Foodies Connect conference
Foodies Connect conference held annually with suppliers (in-person. Our last in-person Foodies Connect was held on 7 September and had the usual attendance of approx. 500 people. Our biannual Supplier Expo took place on 8 and 9 March - this is now the biggest food industry event of its kind in NZ.
Supplier working group
Established a supplier working group and are in the process of establishing a small supplier working group to improve how we work together.
We have a comprehensive small supplier guide that is regularly updated and is available to any interested parties and also shared through our Emerging Supplier Forums. We have also established a dedicated resource within the business for our emerging suppliers and are running Emerging Supplier Forums designed to set our smallest suppliers up for success within our business regionally throughout the country. These Forums are planned to be repeated on an annual basis and in some regions more frequently as demand expands.
We have finalised and received the results of our first FSNI supplier survey which was run independently on our behalf by Advantage Group. We are now taking relevant learnings from the survey and applying them as appropriate within our business.
How are we investing in innovation to benefit consumers?
We’re a customer driven business and innovation is one of the key ways we can enhance our customers’ experience, and ensure our supply chain is efficient and resilient.
Partnership with Uber Eats
21 stores are trialling a partnership with Uber Eats offering ultra-rapid delivery of groceries.
Drive through click & collect
Invested in novel ecommerce fulfilment formats, such as drive through click & collect at PAK'nSAVE Albany and PAK’nSAVE Rotorua.
Investment in new stores
Every year we invest approximately $100m into building new stores and transforming existing ones right around the North Island.
Planning to open approximately eight new stores in our 2024 financial year. To date we’ve opened Four Square Te Kowhai, PAK’nSAVE Warkworth and Four Square Onehunga.
Approximately 58 stores with planned refurbishments in our 2024 financial year.
9,000 new products are introduced on-shelf each year.