Weet-bix case shows size of mountain supermarket challengers need to climb
It's just one product, in one chain of stores. But few stories symbolise the ongoing power of the supermarket duopoly as well as The Warehouse's Weet-bix situation.
Mōrena, and welcome to The Bulletin for Friday, September 29 by Catherine McGregor. Presented in partnership with Z Energy.
In today’s edition: Willis scores big with CEOs in Herald’s Mood of the Boardroom; Hipkins refuses to back down over ‘race-baiting’ claims; Bernard Hickey on the post-pandemic office experience. But first, can the Warehouse ever really be a supermarket alternative if it can’t keep NZ’s favourite breakfast in stock?
A great big breakfast biscuit brouhaha
At first glance, a single grocery brand disappearing from a single chain of stores doesn’t seem much of a news story, let alone one that warrants the sort of blanket coverage we saw yesterday. But amid a cost of living crisis, and with the government finally getting serious about addressing the supermarket duopoly, the Warehouse/Weet-bix controversy instantly became emblematic of the issues plaguing the grocery sector. A behind-closed-doors wrangle with Weet-bix manufacturers Sanitarium burst out into the open when The Warehouse announced its 88 stores would receive no new stock of the breakfast cereal from this Saturday, with Sanitarium blaming vague “supply constraints” for the decision. The Warehouse sells 1.2kg family packs of Weet-bix for $6, up to $3 cheaper than at competing supermarkets, raising suspicions that there’s more to the story than just temporary supply issues. The Commerce Commission is investigating the matter, which chair John Small calls “extremely concerning”. “If you valued all your customers you’d probably try to share out the supply that you’ve got to keep everyone happy,” he said.
The Warehouse’s long fight to establish itself as a supermarket alternative
The news came as The Warehouse Group, which includes Noel Leeming and Torpedo7 stores along with the ubiquitous Red Sheds, released full-year results showing a 66.6% drop in net profit compared to the year before (paywalled). One bright spot was in groceries, particularly the pantry and chilled segment where sales soared by 91.8%. The Warehouse has been trying to establish itself as a supermarket competitor since opening its first Walmart-inspired Warehouse Extra stores in 2008 – a brand extension that ultimately failed just two years later. Last year the retailer’s $4 blocks of butter drew attention to its potential as a lower-priced supermarket alternative, but the ability for people to do their weekly shop at the Ware Whare will remain a pipedream for as long as wholesale “supply constraints” remain.
One year in, has Costco made any difference?
Costco, the other retailer seen as a potential challenger to the supermarket duopoly, celebrated its first New Zealand birthday yesterday. A year after opening in the Auckland suburb of Westgate, Costco is still rammed on weekends, and that’s something for other stores to celebrate, marketing expert Ben Goodale tells the Herald’s Front Page podcast. “The sheer volume” of people going there is an opportunity for other retail in the area, he says. Reps for “big box” retailers agree that the arrival of Costco has been a net positive, Anne Gibson and Alka Prasad report, though nearby Pak n Save and Countdown both stayed mum. That doesn’t necessarily mean they’re suffering: with its much smaller product selection and much higher typical spend, Costco “is not used by consumers as a replacement for shopping at… the nearby supermarket”, according to an Australian study. “So the idea that one store would provide competition for our supermarket duopoly seems unlikely,” write Gibson and Prasad.
The view from Blighty
Since I’m currently living in the UK and have just come back from the supermarket myself, I thought it might be interesting to share some prices from today’s shop. The country is going through a cost of living crisis of its own, and grocery prices have shot up across the board. Still, there were some good buys, especially at Lidl, the German discount retailer which now has stores in most parts of the world. There, a 1kg tub of Greek yoghurt was just £2.20 ($4.50), a 190g jar of bog standard pesto 99p ($2), and a bottle of Bordeaux red wine was £5.30 ($10.85). At my local Asda the savings weren’t quite as impressive: my basket included a 250g block of butter for £2 ($4.10) and some Rose’s marmalade for £2.45 ($5). As for Weet-bix – or rather Weetabix, the UK equivalent – a 1.35kg pack cost a whopping £7 ($14.30). I decided I could do without.
The ‘community of care’ improving the wellbeing of Sāmoan teachers
In a sector challenged by staff shortages and an aging workforce, a grassroots initiative seeks to build connections and improve outcomes for Sāmoan teachers and children in Auckland – with ambitions to expand nationwide. Sela Jane Hopgood met some of the faiaoga and facilitators behind the Tāfesilafa’i programme, finding out how it works and what it wants to deliver for aiga and tamaiti. Read the full story now on The Spinoff. (sponsored).
Willis scores big with CEOs in Herald’s Mood of the Boardroom
National leader Chris Luxon beats his Labour rival – though not overwhelmingly so – in the NZ Herald’s Mood of the Boardroom survey out this morning. The regular pre-election survey of 100 business leaders asks them to rank government ministers and opposition MPs on their handling of economic issues and overall political skills. On average, the prime minister Chris Hipkins scores 2.9 out of 5 on a scale from 1, “not impressive”, to 5 for “very impressive”. Just 5% of respondents marked Hipkins as very impressive, although 28% scored him at 4 out of 5. Luxon scores an average of 3.49. Chief executives also rated National’s controversial tax plan – fiscal details of which are due to be released this afternoon – at an average of 3.17/5 on a 1-5 scale from “not credible” to “very credible”. “Meanwhile, in a Cabinet criticised by business for its inability to execute some flagship Labour policies, Damien O’Connor stood out for ‘getting stuff done’,” the Herald reports. He scored 3.2 / 5, the highest of any current cabinet minister. As for the finance chiefs, 58% of respondents said Grant Robertson has been a credible minister of finance, while 83% think Nicola Willis has presented herself as a credible future finance minister.
Hipkins refuses to back down over ‘race-baiting’ claims
The prime minister has repeated his accusations of race-baiting by his political opponents, continuing a line of attack first aired in this week’s debate. On Wednesday night he challenged Luxon to respond to comments by NZ First candidate Robert Ballantyne, who told a Timaru meeting his party was the only one with the “courage to cut out your disease and bury it permanently”, apparently in reference to Māori. Speaking to an audience in Kawakawa in Northland yesterday, Hipkins said candidates’ options on Māori issues have historically been “race-baiting or just keeping quiet”, reports Matthew Scott for Newsroom .“I’ve decided to do something novel, and that is to tell the truth, and to stick to my own values this election,” Hipkins said. He believed progress on Treaty relationships has never been so at risk in his lifetime, he added. Not long after Hipkins’ speech, NZ First leader Winston Peters issued a statement accusing him and Labour of a "dirt campaign" over the Ballantyne quote. "They're cancelling out democracy in this country and that's what he was talking about."
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The post-pandemic office experience
Many offices are empty now, particularly on Mondays and Fridays, and workers aren’t there to sit at their open-plan desks. They’re there to join Zoom or Teams calls in quiet spaces, or to meet each other in conference rooms. In this week’s When the Facts Change, Bernard Hickey talks to XYSense co-founder and CEO Alex Birch about how building managers, planners and bean counters can understand the best way to run an office of the future.
Click and Collect
Yesterday’s parliament protest was ultimately uneventful for police.
A new 12-part RNZ podcast on the Peter Ellis case is released today.
RIP Michael Gambon, who was so unforgettable in The Singing Detective (and also some films about wizards).
Lucky Levin residents are enjoying giant sausage rolls with the “girth of a Subway”.
Click and Elect
Capital gains taxes are supported by 62% of the population, according to a new Stuff/Essential Reach survey.
If Chris Luxon has to call Winston Peters on October 15 which Winston will answer the phone, wonders Henry Cooke.
The state of the ocean was the subject of Stuff’s Our Oceans, Our Future debate last night. Watch it here.
More analysis of Wednesday night’s debate on the latest episode of Gone by Lunchtime.
It’s happening: There’s finally construction on Wellington’s Golden Mile, reports Wellington editor Joel MacManus. A reader is forlorn that her closest friend has a crush on her. Hera Lindsay Bird advises. Tara Ward talks to Down for Love's Leisel and Brandon, the best reality TV couple of all time.
Sporting snippets
South Africa has won the one day series against New Zealand after beating the White Ferns by seven wickets in the second game in Pietermaritzburg.
Every rugby team strives to be the playground bully, writes Liam Napier in the Herald, and the All Blacks need to once again strike fear into their opponents, starting with Italy this weekend.
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83% of the Boardroom think Nicola Willis has presented herself as a credible future finance minister
Anyone else find this alarming?
About time to boycott all sanatorium brands and demand taxes in charities and religious institutions