Calls for greater powers to get supermarkets competing after report

Grocery consumer advocates want the Commerce Commission to have greater powers to force more supermarket competition.

It comes as the commission's first annual report into competition in the grocery sector since the appointment of Grocery Commissioner Pierre van Heerden is published.

The report painted a concerning picture of the $25 billion grocery sector, he said.

Supermarket margins have increased, profits remained high and the two main operators, Foodstuffs and Woolworths, remained dominant, van Heerden said.

"We want to see more competition and sustained pressure on the major supermarkets to deliver better outcomes for consumers."

Grocery Action Group chair Sue Chetwin told Midday Report The Warehouse selling more groceries and Costco opening in Auckland has brought some competition - but not enough.

"We applaud the report, but what we'd like to see is more action, and the regulator being given more tools to create more competition," she said.

Chetwin worried if the commission simply slapped supermarkets with fines for not changing their ways, consumers would end up paying for them.

"You can't imagine that the duopoly are going to suck those up, they're just going to pass them on to consumers," she said.

"What we really need is more competition."

Woolworths said it had strived to give better value for its consumers, and in the past year had been losing money on some sales with its profits more than halved.

Foodstuffs, behind the New World, Pak'n Save and Four Square brands, said it supported the commission's vision for a more competitive, transparent and fair grocery market.

Van Heerden recently criticised supermarkets for pricing errors, saying New Zealanders were likely losing tens of millions of dollars a year.

And last month he said the Grocery Supply Code was not working properly.

In February, a new tool was launched for whistleblowers to help lift the lid on potential anti-competitive behaviour in the grocery sector.