Foodstuffs break-up: National Party’s plan could force supermarket property ownership changes

“National will pursue the structural separation of Foodstuffs, subject to an independent Commerce Commission assessment, so Kiwis get a fairer deal at the checkout,” Willis said.

Nick Hanson, Chris Quin and David Boersen at the under-construction $170 million Foodstuffs North Island frozen and chilled distribution centre on July 8. Photo / Corey Fleming

The proposed structure would be:

• One nationwide Pak’nSave group;

• One separate nationwide New World and Four Square group.

That would create three major nationwide grocery competitors: Pak’nSave, New World/Four Square and Woolworths.

Pak’nSaves, New Worlds and Four Squares throughout New Zealand are now owned by either

Foodstuffs North Island;Foodstuffs South Island;Third-party investors such as private institutional investors, syndicates or commercial landlords.

The landlord owns the building and site, which is then rented to a store owner-operator, who has paid for the fit-out of the building, as evidenced by new openings of the $73m New World Pt Chevalier and New World Te Atatu recently.

AUCKLAND, NEW ZEALAND – JUNE 29: Scott Jackson, the new owner/operator of New World Te Atatu on June 29, 2026 in Auckland, New Zealand. Herald photograph by Jason Dorday

That store owner then pays rent to their landlord, like many other retailers.

National’s break-up would mean the co-operative’s ownership of Pak’nSave and New World/Four Square stores would need to be split.

Matt Mullins is the owner-operator of New World Pt Chevalier. Photo / Jason Dorday

The same entity would not be able to own all three brands.

But a study on ownership separation questioned the legality of forcing property changes.

In 2023, the Ministry of Business Innovation and Employment released a cost-benefit analysis by Sense Partners on forcing a breakup or divestment of major supermarket chains.

Pak’nSave would be forced to separate from New World.

That addressed private property rights and raised questions about forced real estate sales.

“Given the likely significance of divestment for supermarket owners, natural questions that arise include whether it is lawful or proper for Government to force such a measure.”

That document also raised the same prospect as proposed by National: “Foodstuffs rearranges Foodstuffs North Island and Foodstuffs South Island into two separate nationwide chains split mainly by banner: Foodstuffs Pak’nSave vs Foodstuffs New World.”

Richard Kirke, Colliers International

Top real estate agent Richard Kirke, Colliers’ managing director of the agency, said today some of the properties were owned by Foodstuffs.

“I would imagine the leases would stay in place, but the entities would change as ownership changes. But those leases would remain enforceable.

“What National is trying to achieve is to lower the prices for the shopper.

“The revenue each supermarket would make would be reduced by increased competition.

“The outcome ultimately would be that, because owner-operators would not be making as much money, they may be able to afford to pay less rent.

New World Victoria Park when it caught fire last winter. Photo / Dean Purcell

“In time, you’d expect the value of each supermarket to be negatively impacted because it would not be profitable as it once was. I don’t think the average punter would care.

“In time, unless there is another occupier who could pay more, I think the rent would have to reduce because the owner-operator would not be able to afford to pay as much,” Kirke said.

Syndicates that New Zealanders invest in own Foodstuffs’ supermarkets, he said.

So such a policy change could have a detrimental impact on that group, he said, potentially reducing the value of their properties.

Kirke was one of the two agents who last Friday brokered the $308m sale of a 49% stake in Westfield Albany from Singapore’s GIC to the family interests of Tim Glasson of Christchurch.

Bruce Whillians, managing director of commercial agency Whillians, said the Foodstuffs co-operative owned most of its own properties “and that’s always been its model”.

Supermarkets were widely sought after by investors because they were unaffected by economic up and downturns or pandemics.

NZX-listed Investore Property owns 34 Woolworths in New Zealand.

But the National Party has no planned changes to Woolworths.

Anne Gibson has been the Herald’s property editor for 26 years, written books and covered property extensively here and overseas.

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