New Zealand Initiative Welcomes Focus On Grocery Market Competition, But Cautions Against Changes To KiwiSaver

Wellington (Thursday, 13 February 2025) - The New Zealand Initiative welcomes Minister Willis’s commitment to enabling new grocery entrants into the New Zealand market but warns against politicising KiwiSaver.

Initiative Executive Director Dr Oliver Hartwich said, “We have long argued that New Zealand’s restrictive planning and consenting frameworks have made it unnecessarily difficult for new entrants to establish a viable presence in the supermarket sector. If the government wants more grocery competition, making it legal and simple to open new grocery stores is important.”

The Initiative’s submissions to the Commerce Commission market study into retail grocery highlighted regulatory barriers preventing entry.

Initiative Chief Economist Dr Eric Crampton said, “The government has believed that there are high profits in New Zealand’s grocery sector. But, if those profits truly exist, why hasn’t anyone entered to grab a slice? New Zealand’s Overseas Investment Act, town zoning, and resource management processes made it effectively impossible for anyone to enter. Tearing down those barriers will help.”

The Initiative urges the government to consider a simultaneous fast-track consenting process for any entrant’s full suite of stores and logistics centres, along with mixed-use residential zoning for apartment complexes above these new grocery sites.

Dr Crampton added, “Legalising competition is far better protection for consumers than extensive regulation of the grocery sector. It is certainly better than making risky interventions in the wholesale grocery market.”

Simultaneously, the Initiative advises caution in reforming KiwiSaver, also discussed by Minister Willis today.

Dr Crampton said, “KiwiSaver makes sense if you think that people need to be nudged into the right choices for their retirement savings. But standard portfolio theory for decades has shown that most people’s retirement savings should focus on overseas investment – not domestic. Riskier domestic assets should not be part of most KiwiSavers’ portfolios.”

Dr Hartwich concluded, “Putting a thumb on KiwiSaver to encourage more domestic investment could set a risky precedent.

About The New Zealand Initiative

The New Zealand Initiative is an evidence-based think tank and research institute contributing to public policy discussion.

Supported by the nation’s leading visionaries, business leaders and political thinkers, we are committed to making New Zealand a better country for all its citizens with a world-class education system, affordable housing, a healthy environment, sound public finances and a stable currency.

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