Price wars: Heavy discounting has reduced profitability and hindered revenue growth

The Supermarkets, Grocery Stores and Convenience Stores industry has expanded over the past five years. Stable population and disposable income growth have boosted demand for industry products over the period. In addition, positive consumer sentiment throughout the past five years has encouraged consumers to purchase more gourmet and higher priced items. Industry revenue is expected to rise at an annualised 1.8% over the five years through 2018-19, to $20.7 billion. This includes expected revenue growth of 1.9% in the current year.Industry players frequently discount the branded grocery items they sell, with discounted products accounting for almost 60% of sales revenue...read more.

Industry Statistics & Market Size
Revenue
$21bn
Annual Growth 14-19
1.8%
Forecast Growth 19-24
Profit
Employment
59,007
Businesses
3,570

Industry Threats & Opportunities

  • Industry operators frequently discount the branded grocery items they sell
  • The increasing popularity of small shopping trips in place of a weekly shop has favoured small local stores
  • Online grocery shopping is likely to become more popular as supermarkets improve their web channels
  • Industry Report - Industry Locations Chapter

    The geographic spread of industry participants largely follows population distribution. Consequently, industry operators are primarily based in the Auckland, Wellington, Canterbury and Waikato regions. These regions are the most populous in New Zealand and contain many supermarkets, and grocery and convenience stores. The concentration of industry establishments in Auckland has increased over the past five years, due to rising population spread towards the city. Many individuals move to Auckland to boost their chances of finding a job, as it is the biggest city in the country and is home to many large organisations. Rising residence in the city has encouraged industry players to follow suit over the past five years...purchase to read more.

    Additional Insights for the Supermarkets, Grocery Stores and Convenience Stores Industry

    IBISWorld identifies 250 Key Success Factors for a business.The most important for the Supermarkets, Grocery Stores and Convenience Stores Industry are

  • Ability to control stock on hand
  • Attractive product presentation
  • Proximity to key markets
  • IBISWorld analysts also discuss how external factors such as Real household disposable income and Population in the Supermarkets, Grocery Stores and Convenience Stores industry impact industry performance..

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    What's in this report

    What is the Supermarkets, Grocery Stores and Convenience Stores in New Zealand Industry?

    Operators in the industry are primarily engaged in retailing groceries, such as meat, fish, fruit, vegetables, dairy products, bread, canned goods, toiletries and cleaning items. The industry includes full-service supermarkets, grocery stores and convenience stores, but excludes specialised food-line grocers, such as butchers and greengrocers.

    Industry Products
  • Dry and packaged foods
  • Meat products
  • Fresh fruit and vegetables
  • Other grocery products
  • Beverages
  • Cigarettes and general merchandise
  • Toiletries and health products
  • Industry Activities
  • Operating supermarkets
  • Operating grocery stores
  • Operating convenience stores
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • Real household disposable income
  • Population
  • Consumer sentiment index
  • Demand from cafes, restaurants and takeaway food services

  • Current Performance
  • Big versus small
  • Price discounting
  • In-store changes
  • Industry participation
  • Chart: Revenue Growth

  • Industry Outlook
  • Online shopping growth
  • Private-label product potential
  • Profitability and structure
  • Table: Supermarkets, Grocery Stores and Convenience Stores Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Supermarkets, Grocery Stores and Convenience Stores Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Consumers in New Zealand

  • Key Selling Industries
  • Fruit and Vegetable Wholesaling in New Zealand
  • General Line Grocery Wholesaling in New Zealand
  • Liquor and Tobacco Product Wholesaling in New Zealand
  • Meat Processing in New Zealand
  • Meat, Poultry and Smallgoods Wholesaling in New Zealand
  • Soft Drink and Pre-Packaged Food Wholesaling in New Zealand

  • Products & Services
  • Dry and packaged foods
  • Other grocery products
  • Meat products
  • Fresh fruit and vegetables
  • Beverages
  • Cigarettes and general merchandise
  • Toiletries and health products
  • Chart: Supermarkets, Grocery Stores and Convenience Stores Industry Products and Services Segmentation

  • Demand Determinants
    Major Markets
  • Fifth income quintile
  • Fourth income quintile
  • Third income quintile
  • Second income quintile
  • First income quintile
  • Chart: Major Market Segmentation for the Supermarkets, Grocery Stores and Convenience Stores Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
  • Chart: Cost Structure Benchmarking – Sector vs Supermarkets, Grocery Stores and Convenience Stores

  • Basis of Competition
  • Internal competition
  • External competition

  • Barriers to Entry
  • Table: Barrier to Entry Checklist for the Supermarkets, Grocery Stores and Convenience Stores Industry

  • Industry Globalization
    Foodstuffs (NZ) Limited, Woolworths New Zealand Group Limited,
  • Table: Foodstuffs (NZ) Limited - financial performance
  • Table: Woolworths New Zealand Group Limited - financial performance

  • Capital Intensity
  • Chart: Level of Capital Intensity for the Supermarkets, Grocery Stores and Convenience Stores Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the Supermarkets, Grocery Stores and Convenience Stores Industry
    Includes:
  • Industry Revenue (2010-2024)
  • Industry Gross Product (2010-2024)
  • Establishments (2010-2024)
  • Businesses (2010-2024)
  • Employment (2010-2024)
  • Wages (2010-2024)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Click And Collect
  • A method of shopping where consumers select and pay for goods online that they then collect from a physical store or other designated collection point.
  • Private Label
  • Product brands that are owned by the store they are sold in. These products are produced for supermarkets under contract and typically earn higher profit margins.
  • Self-Serve Checkout
  • Checkouts available for customers to use themselves with minimal supervision from a staff member. Also known as self-checkouts.
  • What Our Customers Say

    Why buy this report?

    The Supermarkets, Grocery Stores and Convenience Stores in New Zealand market research report provides key industry analysis and industry statistics, measures market size, analyzes current and future industry trends and shows market share for the industry’s largest companies. IBISWorld publishes the largest collection of industry reports so you can see an industry’s supply chain, economic drivers and key buyers and markets.

    IBISWorld industry market research reports enable you to:
    • Find out about key industry trends
    • Identify threats and opportunities
    • Inform your decisions for marketing, strategy and planning
    • Quickly build competitive intelligence
    This report on Supermarkets, Grocery Stores and Convenience Stores in New Zealand:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding of industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Supermarkets, Grocery Stores and Convenience Stores in New Zealand market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Supermarkets, Grocery Stores and Convenience Stores in New Zealand, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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