THE COST of living crisis continues to grip New Zealanders even harder, and that's perhaps most evident at the supermarkets. New data tells us that food prices rose 4.6 percent in the year to June. That's the largest increase since 2023.
But New Zealanders have long felt the squeeze at the supermarket checkout. Between 2019 and 2023, weekly grocery spending climbed from $166 to $214, marking the steepest increase among common household expenses.
And there is no realistic solution in sight.
The Act Party are proposing that fast-track legislation should be used for consenting for new stores, making it easier and cheaper for a foreign corporate to set up shop here. Under increasing pressure to be seen to be doing something about the cost of living, it's more than likely that Act policy, or something like it, will become Government policy.
But it's estimated that it would take at least five years for an overseas concern to establish a national chain in New Zealand, and that's of no help to people struggling today. It's also worth noting that no foreign corporate has expressed any interest in establishing a supermarket chain here. That's not surprising given the capital outlay that would be required and with no guarantee that the new concern would be able to secure a big enough slice of the market to be profitable.
The Labour Party, of course, has slammed the Government. It blames the cost of living crisis on government policy. But while Finance spokesperson Barbara Edmonds say's that ''Labour’s number one priority will be to help people with the cost of living', it has yet to demonstrate how it would do this. Given that Labour remains wedded to the neoliberal orthodoxy, it's likely that Labour will simply tinker with an economic model that is fundamentally flawed and is failing ordinary New Zealanders.
It's clear that when the 'free market' can't deliver the goods, it's time for the State to step in. This is not a new proposal. In 2014, journalist Dita De Boni asked the straightforward question: 'Instead of raging against the supermarket mafia, why not tackle them head-on?'
De Boni argued that it was time for government-owned supermarkets:
'The way I see it, a government-owned supermarket chain (KiwiShop? GovtShop? Godzone Grocer?) would need to pay its way, but not necessarily turn a profit - no more rorting of the poorly paid Kiwi workforce to placate shareholders.'
A decade later, the idea of government or community owned supermarkets has been aired again. In his 2025 mayoral campaign, New York City Mayor-to-be Zohran Mamdani proposed a pilot network of five city-owned supermarkets. His proposal has been picked up here. Even the dourly conservative NZ Herald has taken notice.
Under Mamdani's scheme, the city-owned supermarkets would not pay rent or property taxes, which would allow them to keep food prices low. The stores, if developed, will make purchases at wholesale prices, have a centralised warehouse and distribution centre, and will not be focused on profit margins.
They are designed to lower prices, not price gouging,' says Mamdani.
Could such a scheme work in New Zealand? Why not? All that is lacking is the political will from our so-called 'representatives' to introduce such a policy. But, unfortunately, they remain the servants of capital.
The dominance of two supermarket chain, a dominance that doesn't look like it will end anytime soon, has left significant gaps in New Zealand’s food system. These are gaps that government-owned supermarkets can fill more effectively than the free market.
This model frames supermarkets not as profit-making ventures but as essential public services. It would mean New Zealanders would no longer be the prey of a supermarket duopoly that has driven up food prices to the point that more and more New Zealanders are struggling to put food on the table each day. The 2022-23 annual health survey by the Ministry of Health showed that more than one in five children lived in households where food ran out sometimes or often. And more and more people are queuing up at the foodbanks.
It's time, well past time, for a public solution to the ongoing market failure to deliver affordable food to all New Zealanders.
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