Last year Frasers Four Square was bought by new owners and became independent under the name Frasers Supermarket.
Despite Countdown and Foodstuffs holding a duopoly over the market and wholesale supply, Frasers is expanding its operation.
Frasers Convenience opened last week just north of the Countdown block, in Thames St.
Owner Amrik Singh said he had no concerns over Countdown operating so close to their new location.
Customers did not treat Frasers Supermarket, which is located in Oamaru North, as a place to do a big grocery shop.
It was not uncommon for people to pop in and buy a single can of baked beans or a drink.
The new store was even more committed to that model, with fewer specialist items like alcohol and more convenience good and snacks.
"We’re just targeting a different market."
He expected most customers would come at lunch time, or before and after work.
Countdown had higher prices and less range when it came to snacks and people did not want to have to deal with a supermarket if they just wanted one drink, he said.
He also planned to stock hot food cheaper than local bakeries.
Cigarettes would not be stocked, as they were too expensive and had very small profit margins, Mr Singh said.
Frasers Supermarket has also extended its hours.