What the parties' grocery policies mean for your shop

New Zealand's grocery market has become one of the defining cost-of-living issues of the 2026 election campaign.

Over the past fortnight, the Greens, National and Labour have all released major proposals aimed at lowering grocery prices and challenging the dominance of Woolworths and Foodstuffs.

They agree on the diagnosis: competition is weak. They disagree on the cure.

National wants to split Foodstuffs into two competing nationwide groups. Labour wants to separate supermarket wholesale operations from retail stores. The Greens want the Government to buy at least 120 supermarkets and create a publicly owned competitor called KiwiMart.

Those are not three versions of the same policy. They target different parts of the grocery system, with very different costs, timelines and risks.

The market they are trying to change

The Commerce Commission's latest annual grocery report says the three regulated grocery retailers — Foodstuffs North Island, Foodstuffs South Island and Woolworths New Zealand — still account for about 82% of the national market.

There are signs of new competition. Independent supermarkets and specialty grocers are opening, particularly in Auckland and Christchurch. Costco and The Warehouse are growing their grocery offerings. But these businesses remain too small to shift national competition in a meaningful way.

Independent retailers face several structural disadvantages:

lower purchasing volumes;
less access to rebates and supplier discounts;
difficulty obtaining reliable wholesale supply;
weaker brands and customer data;
fewer suitable supermarket sites; and
higher per-unit distribution and operating costs.

The Commission says rebates, discounts and other supplier payments between major retailers and suppliers were worth approximately $6 billion in FY2025.

Food prices increased 4.6% in the year to December 2025. By August 2026, annual food-price inflation had eased to 1.9%, but grocery food was still 1.7% more expensive than a year earlier, according to Stats NZ.

The evidence does not show that supermarket market power explains every high price. Global commodity prices, freight, wages, energy, tax and New Zealand's small, dispersed population all matter. The Commission's concern is more specific: weak competition may make it harder for prices to fall when those costs ease.

That is the problem the three parties are now trying to solve.

National: split Foodstuffs into two nationwide chains

National's proposal would separate Foodstuffs into:

PAK'nSAVE as one nationwide grocery group; and
New World and Four Square as another.

Woolworths would remain the third major nationwide competitor.

National's argument is that PAK'nSAVE and New World may look like competing brands, but they operate within the same Foodstuffs cooperative structures. A nationwide split would give them stronger incentives to compete for customers, sites, prices, promotions and suppliers.

Existing store owner-operators would not be forced to sell or rebrand. They would retain ownership and continue operating under their existing banners.

This would not happen immediately. A re-elected National Government would amend the Grocery Industry Competition Act within its first 100 days, giving the Commerce Commission a new mandate to develop and assess a separation plan. The Commission would have six months to consider commercial viability, supply-chain costs, rural access, supplier impacts, owner-operators and transition costs. National would provide $5 million for that work.

If the Commission recommended separation, National says it would legislate to implement it.

National's supporting cost-benefit analysis projects grocery prices around 3.5% lower than they otherwise would be one year after separation, rising to around 5% after six years. It estimates household benefits of approximately $200 to $1,320 a year, depending on household type and income.

Those are modelled outcomes, not guaranteed savings. The result would depend on whether the new groups genuinely compete and whether duplicated logistics, technology and distribution costs outweigh the benefits of greater rivalry.

The key question is simple: would the split create two genuinely more competitive businesses, or two more expensive businesses carrying duplicate costs?

Read National's announcement and supporting policy document.

Labour: separate wholesale from retail

Labour is targeting a different part of the market.

It would require Woolworths and Foodstuffs to operate their wholesale supply businesses independently from their retail supermarkets. The proposed entities would be known as Foodstuffs Wholesale and Woolworths Wholesale.

Smaller supermarkets and independent grocers would receive guaranteed access to wholesale products on fair terms. Labour would also:

remove contracts that prevent stores such as Four Square operators from lowering prices, changing chains or becoming independent;
prevent major supermarkets cutting off supply when smaller competitors begin gaining customers;
ban supplier “junk fees”;
make rebates and data charges more transparent; and
simplify supplier payment arrangements.

Labour's theory is that independent retailers cannot compete effectively if the two dominant supermarket groups control both retail stores and much of the wholesale supply available to rivals.

This is a vertical-separation strategy. It does not create a third large retail chain by itself. Instead, it aims to make it easier for smaller retailers to obtain competitive supply terms and grow.

That approach aligns closely with the Commerce Commission's findings. Independent retailers have specifically reported problems with wholesale prices, rebates, discounts and access to everyday products.

Labour has also proposed making excessive pricing illegal for large companies with substantial market power in essential markets, including groceries, fuel, energy, telecommunications, banking and insurance. The Commerce Commission would be able to investigate and take companies to court, with penalties and repayment orders available where companies had overcharged consumers.

This would not be a general price cap. The difficult questions would be how to define a reasonable margin, identify the relevant competitive benchmark and distinguish excessive pricing from legitimate cost increases.

Labour's official policies are Fairer Grocery Prices and Banning Price Gouging. RNZ's report covers the wholesale proposal and the response from National and the Greens.

The Greens: create KiwiMart

The Greens have proposed the most direct intervention.

Their Affordable Kai policy would require Woolworths and Foodstuffs to divest at least:

120 supermarkets; and
distribution-centre capacity in both islands.

Those assets would be acquired for a new publicly owned supermarket chain called KiwiMart, with a mandate to prioritise affordability.

The Greens argue that successive governments have tried to encourage a private competitor without success. Rather than waiting for a new chain to emerge, they would create one at scale by acquiring existing stores and infrastructure.

The party estimates that acquiring 120 stores and two distribution centres would cost $1.3 billion, followed by $1.5 billion to capitalise KiwiMart. That is approximately $2.8 billion in upfront capital, before ongoing operating costs.

KiwiMart would need to compete with established brands, loyalty systems, supplier relationships and distribution networks. The public would ultimately carry the acquisition, operating and commercial risks.

The wider Green policy includes:

a ban on excessive supermarket pricing;
greater transparency over supermarket margins;
automatic compensation for pricing errors;
stronger regulation of loyalty schemes and store brands;
increased Commerce Commission funding and penalties;
a $150 million annual Fair Food Fund;
increased food-bank and regional food-distribution funding;
a larger Work and Income food-grant cap;
a National Food Strategy; and
restored and expanded school lunches for approximately 150,000 additional children.

These measures are aimed not just at cheaper supermarket baskets, but at reducing food insecurity directly. Competition policy may lower prices over time; food grants, school lunches and community funding help households that cannot afford enough food today.

Read the Greens' Affordable Kai announcement and full policy.

Three different theories of change

The three policies can be reduced to three different theories about what is keeping prices high.

National says the problem is insufficient retail rivalry. Splitting PAK'nSAVE from New World would create three large groups with stronger incentives to compete directly.

Labour says the problem is control over wholesale supply. Separating wholesale from retail would make it easier for independent stores to enter, expand and challenge the major chains.

The Greens say the problem is the absence of a credible third player. KiwiMart would add a public competitor with an explicit affordability mandate, backed by stronger price regulation and food-security spending.

What this means for Kete shoppers

None of these proposals changes a price at the checkout today. National's plan depends on an election win, legislation, a Commerce Commission assessment and further implementation. Labour's wholesale reforms would need detailed rules and enforcement. KiwiMart would require years of acquisition, capitalisation and rollout.

If any of the reforms proceeds, the effect will probably be local before it is national. A new competitor may put pressure on nearby stores first. A newly independent grocer may offer better prices in one suburb but not another. Wholesale access may improve for some retailers before it changes the national market share figures.

That is why national averages are not enough. Kete records prices at individual Woolworths, New World and PAK'nSAVE stores — and, for Woolworths, at delivery-suburb level. Prices can differ between stores, cities and islands. A policy that works in one local market may produce no visible change in another.

The useful measures will be concrete and store-level:

Does the same product become cheaper at nearby competing stores?
Do regular prices fall, or do savings appear only through short promotions?
Do specials become deeper or more frequent?
Do price gaps narrow in places with stronger competition?
Do any gains persist after new groups absorb the cost of restructuring?
Does a new retailer add meaningful choice where people actually shop?

Kete cannot determine whether a policy is legally workable, commercially viable or good public spending. It can preserve the price record needed to see whether a policy reaches the shelf.

Policy announcements set a direction. The price history shows what reaches the checkout.

Search for a product on Kete and choose the stores relevant to you. Compare today's prices, check the history, and come back as the market changes.