Countdown 'not surprised' by new Auckland supermarket chain

Countdown 'not surprised to see competition responding'.

Supermarket giant Countdown says it is "not surprised" to see its competitor's move to launch a new Auckland chain.

Foodstuffs North Island yesterday opened the first smaller-format Fresh Collective by New World store on the North Shore in ex-Nosh and ex-New World premises.

Chris Fisher, Countdown's merchandise general manager, said it was no surprise to his business that Foodstuffs had made the move.

"The New Zealand grocery market is incredibly competitive, with customers having more choice than ever before about where they shop and what they buy," Fisher said.

"We've seen a terrific customer response to our recent focus on our fresh offer such as our new look Ponsonby and Mt Eden stores, our free fruit for kids and our direct relationships with growers, so we are not surprised to see competition responding."

Steve Bayliss, Foodstuffs North Island's group general manager, said yesterday the new chain was opened partly in response to competition from takeaways, home-delivery meal solution businesses and restaurant trade growing at three times supermarket sales.

Chris Quin, Foodstuffs North Island chief executive, said last week the new small-format chain concept was also partly due to rising real estate prices.

One supermarket specialist who did not want to be named said: "New Zealand's supermarket war is primarily about market share. The greatest method for gaining that is by cannibalising it from the competitor.

"The biggest gains are made by putting more stores on the ground. So the war is principally a real estate one. The chain that puts down the most stores over time, in the most convenient locations, will gain market share at the expense of the other chain.

"Countdown has been vastly out-spending Foodstuffs and has shifted market share to almost parity now. It has been done with backing from Countdown's owners, Woolworths.

"Foodstuffs can't compete with the capital expenditure and they're struggling most in Auckland," the specialist said.

Bayliss named the area from Greenlane to Westmere as a "corridor, not a lot is there from the Foodstuffs group". Parts of Auckland would become more intensively developed and require more supermarkets, Bayliss said.

Fisher said Countdown would continue to serve its customers well.

"Kiwis are looking for affordable, convenient, good quality fresh food and that's what we'll continue to provide, whether through the convenience of our local stores or our very popular online shopping service which is available throughout New Zealand," he said.