Competitive grocer Supie disappointed suppliers asked it to up their prices
Saturday, 8 April 2023
Suppliers to online supermarket Supie have asked it to raise the shelf price of products despite it having no financial gain for suppliers.
The most recent Supie investor update from the board of directors said the store was doing well and had grown orders by more than 150% in less than three months.
But one section raised eyebrows.
“Supie is obviously making an impact, but we’re seeing the pushback from this with multiple suppliers reaching out to us concerned that our prices are competitive with the duopoly and demanding that we increase retail pricing, despite maintaining reasonable profit margins,” it read.
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Supie launched in mid-2021, aiming to create competition in the billion dollar supermarket industry which was dominated by two players, Foodstuffs and Woolworths NZ.
It recently lowered its grocery prices to undercut the big players, Pak 'n Save, New World and Countdown.
Supie founder Sarah Balle told Stuff it was disappointing some of its 400 suppliers had requested they increase them to their set recommended retail prices.
“This is not suppliers requesting to increase their wholesale prices to us – that process hasn’t changed – this is them asking us to increase our prices in the market,” she said.
”We’re unsure as to the specific reason why they’ve put the request to us, as it doesn’t immediately impact them – they’re not receiving any additional margin if we did increase our prices.
“We can speculate the reasons why they have requested this to us, such as perception in the market, pressure – or potential pressure – from their other wholesale customers to match our prices without impacting their margin, and so on.”
Supie had requested advice from the Commerce Commission and was taking an “educational approach”, letting their suppliers know their obligations on Resale Price Maintenance.
Under the Commerce Act, certain agreements and mergers were prohibited as they can lead to anticompetitive outcomes, such as increased prices or lack of choice for consumers. This included agreements that had the effect of fixing, controlling or maintaining prices of goods or services and a supplier enforcing a minimum sale price for retailers.
The Commerce Commission has been approached for comment.
The items were 1kg of loose tomatoes, brown onions, carrots and bananas, a head of broccoli, a 12-pack of size 7 eggs, a 2L bottle of milk, a 1kg block of cheese and a loaf of bread.
Supie was the cheapest place to grab the eight products with the total coming to $42.78. This was followed by Pak ‘n Save, which was the cheapest supermarket – $43.51.
The Warehouse came in at $44.00, Countdown was $44.66 and New World was the most expensive at $47.26.