Commerce Commission Retail Market Study 2022

The recent report came out about how competition is not working the the NZ food retail market sector. Essentially because there is a duopoly. Apparently the two big players are making super normal profits of a $1 million NZD each day. WOW.

The report? I am going to criticize the recommendations. The main ones were to build more supermarket through competitors. This won’t work; cost of land, cost of materials, labour shortage, traffic, carbon emissions etc.

The focus of government policy should be really simple.

  1. Provide incentives for online food retailing to develop. Create thousands of new competitors which will work now rather than in 2 years time. Build the SME economy. Great pathway out of the COVID19 debt.
  2. Provide incentives and invest in the supply chain. Particularly, in the last mile home delivery. I am not sure why Uber is not engaging in this.

Simply put. Just doing more of what we are doing is not going to work. It also won’t future proof us for the next pandemic or economic shock.

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