New Zealand retailer The Warehouse has cut loose its budding supermarket endeavour, Extra, as it becomes apparent there is little room for a third supermarket player in the country’s market.

The sale of groceries by the company will be phased out over six months, with an estimated exit and restructuring cost of NZ$10-12m.

The severing of The Warehouse’s three supermarket stores has opened the company to a takeover from either Australia’s Woolworths or New Zealand company Foodstuffs, according to The Sydney Morning Herald.

A legal barrier prevented a takeover while The Warehouse was also in the supermarket game, but as the company pulled out of the grocery retail sector industry figures have anticipated a bidding war between Woolworths and Foodstuffs.

Woolworths has said it was still considering a bid on the company, and Foodstuffs Auckland managing director Tony Carter said there were now no legal hurdles to a takeover.