Supermarket competition: row over influencer 'poaching', ahead of report

Thursday, 3 March 2022

Supie founder Sarah Balle says the online supermarket could become the Kiwibank of the groceries market but wants new protections from some business practices.

The chief executive of online supermarket Supie, Sarah Balle, says a number of its social media influencers have been poached by one of the big supermarket chains over the past two weeks.

The claim threatens to open a fresh sore ahead of the Commerce Commission’s publication on Tuesday of its final recommendations to improve competition in the $22 billion groceries industry. Supie is hoping to play a major role.

Sarah Balle said “multiple” Supie influencers had been offered a lot of money under “exclusive” contracts that meant they could no longer promote Supie. She said she thought the tactic was deliberate.

Supie had about 30 influencers and had “put in the hard yards”, working very closely with the business since its launch last year, she said.

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“We know that one of the supermarket chains has basically ‘bought’ our influencers and said they can't do any work with Supie while they are working with them.”

Balle said the chain was not Foodstuffs North Island. “I am pretty sure it was Countdown,” she said.

Countdown denied the claim, and said Supie had attempted to recruit one of its contractors.

Supie hopes to create a mainstream online-only alternative to the two big supermarket groups.

Countdown spokeswoman Charlotte Haycock said the

supermarket group worked with an agency to create influencer content.

She said it did not target influencers who worked with competing brands or products.

“In fact, we steer clear of it because Kiwi audiences tend to find it really inauthentic when influencers switch brands all the time,” she said.

Commerce Commission chairwoman Anna Rawlings presents the commission's draft report into the grocery sector in July.

Haycock said that if Countdown was working on a specific campaign, for example for seasonal produce or a new own-brand product, its contracts with influencers would generally ask them not to work on a competing product or brand during that campaign, which might be for up to weeks.

“Other than that we don’t have long-term exclusivity with influencers,” she said.

Balle declined to comment on Countdown’s response, saying she needed to protect the privacy of those Supie had relationships with, but did not retract her claims.

The Commerce Commission signalled in a draft report in July that it could go as far as recommending Countdown and Foodstuffs, owner of the Pak ‘n Save and New World supermarket brands, be required to sell some of their stores to help make way for a third major supermarket group.

But Balle said that would require a law change that she would be surprised if the supermarket giants didn’t challenge in the courts.

Countdown says Supie tried to recruit one of its contractors.

“Our view is it would not benefit consumers any time soon,” she said.

She hoped the commission would instead recommend the Government invest in a rival to Countdown or Foodstuffs – such as her own business, Supie – saying that would bring about more competition, faster.

In October, Supie said it could become the Kiwibank of the groceries industry, with government backing.

Supie raised $2.5m in its first seed-funding round in November.

But Balle said it could quickly scale-up nationwide to offer “like for like” competition to Countdown and Foodstuffs, though without bricks and mortar stores, if it had access to at least $150m in new capital.

She said on Tuesday that she was not suggesting the commission recommend the Government invest directly in Supie.

Instead, she said it could recommend the Government provide funding to iwi to invest in competitors to Countdown and Foodstuffs or instruct the likes of the NZ Super Fund to do so.

The recipients of those investments should be determined by a competitive process, she said.

Both Kiwibank and investments the Government had made through its Rural Broadband Initiative set a precedent for that sort of intervention, she said.

“This is us presenting an option. We would provide a kind of ‘shortcut initiative’ for iwi or another player, because we are already set up and ready to go.”

Foodstuffs North Island told the commission in December that a “produce bundle” that Supie was selling online for $15 would cost $30 if bought from Pak ‘n Save and $40 from New World.

“I would say that with additional capital and with our growth path, that we will end up being pretty price competitive which is what the market needs,” Balle said.