New Zealand is set to introduce new legislation in November 2025 designed to expedite the approval process for new supermarkets, aiming to foster greater competition and reduce prices for consumers. The government, led by Finance Minister Nicola Willis, is implementing these changes in response to concerns that the current regulatory environment favors established players like Foodstuffs NZ and Woolworths, thereby hindering new market entrants.
The proposed legislation will establish an "express lane" for supermarket developments, streamlining historically lengthy and costly approval procedures. This initiative addresses feedback from potential market entrants who have cited restrictive zoning, slow consenting, and complex regulations as significant barriers. Previously, obtaining resource consent for a single supermarket could take up to four years and cost over $1 million; the new laws aim to reduce this timeframe to under a year for qualifying projects.
To further facilitate the process, the government plans to appoint a single authority to oversee all supermarket approval processes and clarify foreign investment pathways. This reform aligns with recommendations from The New Zealand Initiative's May 2025 proposal for a Fast-track Supermarket Entry and Expansion Omnibus Bill, which emphasized streamlining rezoning, consenting, and investment clearance. The government's approach recognizes competition as a public interest in consenting and aims to create national certainty for building approvals.
International retailers, including Costco, have welcomed these reforms, with Costco indicating they will support its future expansion plans in New Zealand. Several domestic companies have also expressed interest in entering the grocery sector, signaling a potential increase in market diversity. While some have called for the structural breakup of existing major players, the government is prioritizing regulatory streamlining, with Finance Minister Nicola Willis stating that any restructuring decisions would require a rigorous cost-benefit analysis.
In parallel, the government is strengthening enforcement under the Fair Trading Act to prosecute companies that misuse their market power to eliminate competitors, introducing an objective economic test for such offenses. These measures are a response to ongoing concerns about New Zealand's grocery prices, which are higher than the OECD average. The Commerce Commission's 2022 market study highlighted that competition in the sector was not functioning effectively for consumers, with a duopoly of Foodstuffs NZ and Woolworths dominating the market with a combined share of at least 70-80%. By easing entry barriers, the government aims to cultivate a more dynamic market, encouraging existing players to improve their pricing and offering consumers greater choice and value.