Price drop: The small supermarket undercutting the major players

Wednesday, 18 January 2023

Online supermarket Supie says it has lowered its grocery prices to undercut the big players.

Supermarket start-up Supie says it has lowered its grocery prices to undercut the big players, Pak 'n Save, New World and Countdown.

The Auckland-based business was set up 18 months ago, hoping to drive more competition in the $22 billion grocery sector.

Last year it expanded to take wholesale orders for small resellers, such as dairies.

Supie said it lowered its prices across its 7000-strong range of goods on Monday. It sells fresh produce, dairy, pantry goods and cleaning and washing products.

* Explainer: Why do we pay so much for our groceries in New Zealand?

Former ministers Jacinda Ardern and David Clark discuss supermarket reforms in August.

* Is Aldi the fix for NZ's supermarket pricing issues?

Some products offered with considerable savings include a 500g block of Anchor butter for $6.90 compared to $7.99 at Pak 'n Save and $8.50 at Countdown, a 1kg bag of long grain rice for $1.75 compared with $1.89 at Pak ‘n Save and $2.40 at Countdown.

A kilogram of bananas are sold for $3.25 at Supie compared with $3.29/kg at Pak 'n Save and $3.99 at Countdown, and Vogel’s bread for $3.95 which sells for $4.49 at its larger competitors.

But Supie said it struggled to compete with the big three supermarket brands on some product lines, including meat products, that were sold in huge volumes and prices negotiated for nationwide bulk order quantities.

Supie founder Sarah Balle said the business had grown to more than 30,000 customers and was used widely in the Auckland region. It recently launched on TheMarket.com and delivers to customers outside Auckland through that platform.

“We’ve always said that the more Kiwis that shop with us the better our pricing will be and after 18 months we’ve finally got to a new level of customer base where we’re able to drive more competition in the sector by lowering our prices,” Balle said.

Supie was able to drop its grocery prices at a time when inflation was at a high and prices generally on the rise because it was able to negotiate lower prices with its suppliers to pass on.

Prices were dynamic, however, and changed weekly, she said.

Being an online-only business with one central warehouse in Wiri, Auckland, and no physical stores meant Supie had low overhead costs and it was ultimately easier to keep costs down, Balle said.

Supie had an increasing market for customers buying reduced to clear products through to those after premium products, she said, adding that Supie had plans to reduce prices further as it got more people shopping with it.

It hopes to hit a goal of 50,000 shoppers by the middle of the year.

“We’re working really hard not just with our suppliers and food producers and growers, but on our supply chain so that we are ensuring we’re controlling what we can control and minimising our costs at every step because it is so important in this cost of living crisis that we’re in to support everyday Kiwis facing increasing costs in their households and to make sure we can pass on any savings we’ve got.”