Woolworths and Foodstuffs under investigation by Commerce Commission

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The focus of the investigations is to consider if certain pricing and promotional practices of the supermarkets comply with the Fair Trading Act 9file image).
Photo: RNZ / Cole Eastham-Farrelly

The Commerce Commission has launched investigations into the country’s two big supermarket chains.

The commission has confirmed it is looking at Woolworths and Foodstuffs, which operates New World, Pak’nSave and Four Square.

The watchdog said the focus of the investigations, which were in the early stages, was to consider whether certain pricing and promotional practices of the supermarkets comply with the Fair Trading Act.

After the commission released findings of its market study of the sector, an industry regulator, a mandatory code of conduct, compulsory unit pricing and other measures were introduced in an effort to rein in the supermarket duopoly.

Grocery Commissioner Pierre van Heerden had said he wanted to level the playing field to improve competition, lower prices, and give consumers choice.

Foodstuffs said it will cooperate fully with the investigation. It said it takes pricing and accuracy and integrity of its promotions very seriously.

A Foodstuffs spokesperson said it had made ongoing improvements to its pricing and promotional processes across its co-ops and had been implementing the commission’s final recommendations following their market study into the supermarket industry, regularly publicly reporting on its progress.

Woolworths said the Commerce Commission has contacted it regarding the pricing complaints the watchdog has received since September 2022. It said it will cooperate fully with the investigation.

Problematic pricing

Last August, Consumer NZ complained to the commission, asking it to investigate the supermarket duopoly for potential breaches of the Act.

Before that complaint, the consumer group asked New Zealanders to send it examples of “dodgy specials” or examples of unclear or misleading pricing and promotional practices at the supermarket.

It said it received 80 examples of problematic pricing across both operators during June 2023.

In response, Countdown had said it was committed to making sure prices in its supermarkets were clear and unambiguous, while Foodstuffs had said it worked quickly to correct pricing mistakes and would always refund customers when they had been incorrectly charged.

Countdown managing director Spencer Sonn had said he had asked teams to prioritise further action on product pricing, and was looking to commission an internal review into in-store systems to see whether there were ways to reduce the risk of errors occurring.

Foodstuffs public relations head Emma Wooster had said significant progress had been made in simplifying pricing and promotions within Foodstuff supermarkets, and they supported recommendations by the Commerce Commission to address pricing errors.