Woolworths will open a large new store in Three Parks in mid-2027, competing with Wānaka’s two New World stores and driving down prices, right…right? Unfortunately, there’s no simple answer to that question. In 2022, the Commerce Commission released its market study into competition in the grocery sector, reporting that New Zealand’s major grocery retailers, Woolworths and Foodstuffs, operate as a duopoly and that if competition was more effective, “the major grocery retailers would face stronger pressures to deliver the right prices, quality and range to satisfy a diverse range of consumer preferences." In a summary of the Commerce Commission’s 2025 update on the grocery sector, it is reported that just 79% of New Zealand’s population have the choice between a Woolworths store and a Foodstuffs store, and Wānaka has historically been in the minority with no choice. Wānaka has two New Worlds, as well as Four Squares in Wānaka and Albert Town, with all of these stores operated by Foodstuffs South Island. Woolworths operated a small “Metro” store on Ardmore street between August 2021 and August 2025, and operates Fresh Choice in Lake Hāwea. However, the arrival of a large Woolworths store so close to New World Three Parks and just a five minute drive from New World in town represents a new, more direct form of competition for the weekly shop in Wānaka. So will this lower prices? The Commerce Commission’s Market Study said, “in general, we would expect grocery prices...to fall if a retailer that is expected to be a strong competitor enters a local market.” However, research conducted by Frontier Economics on behalf of the Commerce Commission “found that there was no systematic relationship between the entry, exit or rebranding of a store and the prices charged by a close competitor store in the 12 months after the event.” The trouble is that each supermarket’s prices have generally been the same across the South Island, whether you’re spending money at a Pak’nSave in Queenstown or Christchurch, or a Woolworths in Nelson or Invercargill. The market study said that this context sees consumers in markets where there is no local competition — such as Wānaka at present — benefit from competition taking place on a national scale, but it means that when a new supermarket enters a location close to an existing one, there is little impact on price. Asked whether Woolworths new Wānaka store would compete directly on price with the existing New World stores in the town, a spokesman for Woolworths said, “pricing in our Wānaka store will be the same as other South Island stores.” However, a spokesman for Foodstuffs said “owner-operators have the flexibility to make decisions for their own businesses.” Opening the door to direct competition with Woolworths, the Foodstuffs spokesman said, “as a result, while many products may be similarly priced across stores, pricing can and does vary between locations.” And the Commerce Commission offered further hope. Asked whether it would expect a competitor moving into a local market to lower prices in 2026, a spokeswoman said, “more options for where consumers can get their groceries in a geographic area generates more competitive pressure on existing supermarkets to fight for customers. This generally sees better value, range, and innovation for consumers." ruairi.oshea@alliedmedia.co.nz
