The deal means Woolworths' wholesale business, known as New Zealand Grocery Wholesalers, has 15 customers supplying 25 shops. (file image) Photo: RNZ / Cole Eastham-Farrelly
A new convenience store chain believes it will be able to offer more competitive prices after signing a wholesale agreement with Woolworths New Zealand.
Woolworths has agreed to provide groceries to the KwikMart branded stores, owned by the National Retail Group.
The deal meant Woolworths' wholesale business, known as New Zealand Grocery Wholesalers, had 15 customers supplying 25 shops.
It comes after the Commerce Commission's market study into the grocery sector called for improvements in the wholesale supply of groceries.
National Retail Group executive director Sandeep Aggarwal said the group had two members but planned to have 20 this month and 50 in six months.
The deal with Woolworths could save stores 5 to 10 percent in costs, Aggarwal said.
The agreement would benefit consumers and convenience stores, he said.
"What's happening at present is the retailers are going to the supermarkets to shop there to buy the products for their retail stores."
However, with the Woolworths agreement, National Retail Group would be able to supply KwikMart stores at their doorstep, saving time and money for store operators, Aggarwal said.
"[The second benefit] is the lower price. Because of the strategic partnership, the price at which Woolworths will be supplying us the products is definitely going to save money," he said.
NZ Grocery Wholesalers general manager Steve Sexton said the deal would help increase competition in the grocery sector.
"It's fantastic to have National Retail Group on board as part of our ongoing work to provide better options for Kiwi shoppers across the board," Sexton said.
"We've already started making deliveries to their site and look forward to working with the KwikMart members around Aotearoa to help ensure a great range of supply for their customers."
Woolworths said NZ Grocery Wholesalers operated separately from Countdown, SuperValue and FreshChoice, with a separate buying team.
In September, Woolworths made its first deal to sell a wide range of wholesale groceries to another retailer outside its own store brands.