The Warehouse Group takes another step to rival supermarket duopoly, selling popular egg brand for $5

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By Benjamin Plummer of

The Warehouse is selling cartons of a dozen Farmer Brown fresh colony eggs for $5 in all stores across the country. (File image)
Photo: RNZ / Nate McKinnon

New Zealand’s biggest retailer is continuing its efforts to become a place for Kiwis to buy their essential groceries by taking a crack at egg prices.

In a move that may ruffle feathers, The Warehouse is selling cartons of a dozen Farmer Brown fresh colony eggs for $5 in all stores across the country.

The “everyday low price” deal was brought in after The Warehouse sold thousands of cartons when it ran the same deal in December.

“We hatched this plan after seeing how well Kiwis responded to the $5 price as part of our daily deals promotion, and we hope plenty of smart and savvy shoppers get down to The Warehouse to grab a carton of eggs,” said Jenny Epke, chapter area lead for buying and design at The Warehouse Group.

The $5 deal rivals all of New Zealand’s biggest supermarkets, with the popular Farmer Brown branded eggs currently selling for $8.39 at Countdown and New World and $7.59 at Pak’nSave, according to the supermarkets’ websites.

“We’re focusing on bringing grocery prices down in a tough grocery market, and are striving to be the cheapest go-to for breakfast and lunchbox essentials for Kiwi families,” Epke said.

“We’re tackling the price of grocery essentials one-by-one – we’ve got $4.30 butter, $3 milk, $1.25 bread, $8 cheese and now $5 eggs as another key staple. The price of food is a huge challenge that Kiwi families are navigating and they deserve to have access to the essentials at reliable and affordable prices.”

The $8 cheese refers to a 700g block of Mainland Colby or Edam, which costs $13.90 at Countdown and $13.99 at New World stores.

The latest move by The Warehouse has been welcomed by Consumer NZ, which says lower pricing drives competition.

“New Zealand has been crying out for more players to take on the supermarket duopoly, so we’re pleased to see that The Warehouse is not only offering sharp pricing to their customers but on staples like eggs,” head of advocacy and research Gemma Rasmussen said.

While The Warehouse would be making little money off the sale, it would be likely to bring in more customers.

“This is called a ‘loss leader’, where, despite making a potentially small profit on this ‘leading’ product, The Warehouse will attract shoppers to their store, who will be likely to pick up other pantry essentials or fresh produce on their way to the checkout,” she said.

There are now 22 Warehouse locations that stock fresh produce. (file image)
Photo:

It is the latest move in The Warehouse’s attempts to rival the supermarket duopoly after launching a fresh produce trial in six selected stores around the country in February last year.

“In March last year, we wanted to see whether The Warehouse’s expansion into selling fresh produce has led to more competition for the surrounding supermarkets. While prices at New World and Countdown didn’t move much, we did notice a drop in prices at Pak’nSave on some products,” Rasmussen said.

There are now 22 Warehouse locations that stock fresh produce.

The $5 Farmer Brown deal is available in every Warehouse store, with a limit of six cartons per customer.

“The supermarket duopoly is very comfortable with the status quo. We’re not, and we’ll continue to push to make groceries more affordable for Kiwi families,” Warehouse Group chief executive Nick Grayston said last year.

In September last year, The Warehouse Group squared off against giant health food brand Sanitarium after discussions that it would stop supplying Weet-Bix because of a shortage of the product.

Grayston said it was a sign of the supermarket duopoly getting what it wanted.

Sanitarium said it would reinstate supplies of Weet-Bix to The Warehouse after controversy erupted following the news.

“To supply the retailer, the company has decided to reduce allocation into export markets to release the capacity to supply Weet-Bix to The Warehouse,” Sanitarium said at the time.

– This story was first published by the New Zealand Herald.