Independent grocer announces plans to open more than 20 new stores over the next five years
Independent New Zealand grocery retailer Paddock to Pantry has announced plans to open more than 20 new grocery stores as part of a NZ$25mn expansion programme set to create up to 1,000 jobs and bring greater supermarket competition to underserved communities.
The expansion plans will see the retailer open one new store every three months over the next five years beginning with Kinloch, near Taupō, in December 2026, followed by new locations on the North Island’s East Coast and South Auckland in the first quarter of 2027.
The expansion will take its physical retail network from two stores in Karaka and Kahawai Point, Glenbrook, to more than 22 nationwide, while transforming the business from a predominantly online grocery operator into a national bricks-and-mortar supermarket chain.
Currently, e-commerce accounts for around 90 per cent of the company’s sales but is expected to fall to approximately 33 per cent within five years as its physical network grows.
The company said it will target communities underserved by existing supermarket competition, introducing the same competitive grocery promotional pricing across its stores regardless of location. It explained this would help reduce geographic price disparities and put pressure on established supermarket operators in areas where consumers have limited choice.
The five-year investment programme includes approximately NZ$10mn in new retail stores, a proposed 5,000m2 distribution centre and an expansion of the company’s delivery fleet to 25 vehicles.
The retailer is also calling for the establishment of a government-backed Supermarket Growth Fund to provide low-interest loans to privately owned grocery operators, arguing it would be a comparatively low-cost way to accelerate competition by helping existing independent operators expand more rapidly.
John Kennerley, Paddock to Pantry business manager, said changes to supermarket competition settings have provided the foundation for independent operators to compete with the major grocery chains, but the rate at which privately owned businesses can expand remains constrained by access to capital.
“The groundwork has already been done through the changes to supermarket competition settings,” he said. “Those reforms have opened the door for independent operators like us to compete, and we’ve demonstrated that the model works.”
He said the company has already established the distribution infrastructure, supplier relationships and purchasing scale needed to support a larger retail network, meaning further expansion is primarily a matter of securing premises, fitting out stores and recruiting staff.
“Scaling from here is largely a matter of securing the capital to fit out stores, stock shelves and employ local people,” he said.
“That’s why access to low-interest funding could make such an immediate difference. We’re not asking the government to fund the creation of a new supermarket business. We’re talking about helping established operators replicate a model that’s already working.”
Kennerley said a Supermarket Growth Fund could allow New Zealand’s second tier of privately owned grocery competitors to double or triple their expansion rates, bringing forward investment, employment and pricing benefits that might otherwise take years to achieve.
He added that the government would not need to build or operate supermarkets itself, but could instead provide commercially assessed, repayable loans to businesses with established operations and credible expansion plans.
“Unlike the major supermarket groups, privately owned operators don’t have access to the same financial resources, so expansion has to be funded progressively,” he explained.
“With access to low-interest, repayable loans, we believe we could at least double our current rollout and potentially triple it. That would mean more supermarkets opening and more jobs being created over the same period.
Kennerley said the existing supermarket competition policy is starting to gain traction, but it takes time for independent competitors to build scale.
“Rather than waiting for another international supermarket chain to enter New Zealand and establish a national network from scratch, we could accelerate the growth of businesses already operating here,” he said.
“For a relatively modest financial commitment, the government could unlock substantially greater private investment and bring meaningful competition to underserved communities much sooner.”
Paddock to Pantry’s first new store will be a 500m2 grocery outlet in Kinloch, with larger supermarket-format sites planned for the East Coast and South Auckland.
The company is seeking sites ranging from 500m2 to 1,800m2, with larger stores expected to employ around 50 people each. The programme could create up to 1,000 retail jobs, alongside additional employment in warehousing, transport and distribution.
Kennerley said the strategy is focused on locations where limited supermarket choice has historically reduced competitive pressure on grocery prices, including both regional centres and metropolitan suburbs.
Paddock to Pantry’s growth follows changes to wholesale grocery access arrangements, which enabled the company to establish the purchasing volumes needed to negotiate directly with major manufacturers.
The business recorded a 197 per cent increase in sales in the 12 months to 31 July 2026, off a multimillion-dollar sales base, and now processes thousands of orders daily, carries more than 2,000 products and sources more than 99 per cent of its purchasing by value directly from manufacturers.
Kennerley said these supplier relationships and the scale of its existing online operation provide the foundation for its physical store expansion.
“We’re not building a handful of specialty food stores. Our ambition is to become New Zealand’s third-largest grocery retailer and provide a genuine alternative to the two dominant supermarket groups,” he said.
“We’ve demonstrated that we can compete online on price, range and service. The next stage is translating that into a physical network that brings those benefits directly into more communities.”
The retailer’s established foodservice operations will also help support the expansion, allowing smaller stores to combine traditional grocery retailing with prepared food and other services suited to local demand.
Larger sites will operate more closely to a conventional supermarket model, while smaller stores will have greater flexibility to tailor their offerings to individual communities.
Kennerley said improved road infrastructure between Auckland, Hamilton and Taupō has also helped make expansion more commercially viable by allowing more efficient distribution across wider geographic areas.
The company’s proposed new 5,000m2 distribution centre will increase capacity beyond its existing infrastructure, servicing both its growing brick-and-mortar network and nationwide online grocery operation.
“Every new supermarket represents local employment, investment in commercial property and additional demand for transport and distribution services, as well as greater choice for consumers,” Kennerley said.
“We believe New Zealand’s next major source of supermarket competition can come from the privately owned operators already in the market. The opportunity now is to give those locally owned businesses the means to grow much faster.”
