A new independent supermarket in Christchurch is hoping to offer cheaper grocery prices to customers.
Kai Co says it’s cutting out the so-called middleman, claiming its model completely differs from the big chains.
The store, in Northwood, is the brainchild of 32-year-old Ethan Vickery and his father Shane.
“Me and my dad have been managing retail stores for a while and what we realised [was] there were a lot of people clipping the ticket and not adding value on these big structures,” Ethan Vickery said.
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Instead of relying on central distribution centres and bulk orders as the major players did, Kai Co bought from local suppliers to save money.
“We can buy direct from meat suppliers – all of our beef and lamb has come from 30km up the road. So it sort of cuts out that big middleman,” Vickery said.
Producers didn’t pay to have their products on the shelf, and meat was processed on site to keep costs down.
“I work in whole bodies, which means they get those bodies in cheaper... and the customer gets the best benefit of that,” says Kai Co butcher Ricky McSeveny.
The store is already attracting customers with specials such as 350g punnets of strawberries for $2.99.
Industry experts said it was a bold move, but one store wouldn’t break the grip of New Zealand’s supermarket duopoly.
Gilbert Peterson from the Grocery Action Group. said: “I’m very positive about what they’re doing. It’s a great initiative and it takes courage and a lot of work.
"But if we had another 120 similar operations, then it would start having a big impact. Just one-off? Not so much.”
Tex Edwards, credited with breaking up the Telecom and Vodafone duopoly, said the real problem is food distribution – monopolised by Foodstuffs and Woolworths.
“It’s not OK just to break out one brand like a Pak’nSave, because Pak’nSave benefits from geographic distribution. You need what we call in economics a like-for-like ecosystem – a footprint of stores and a like-for-like product range,” Edwards says.
However, Vickery believed the Kai Co model could be replicated.
“It’s definitely doable. If you can have a butcher shop that sells meat cheaper than a supermarket, and a produce shop that sells produce cheaper than a supermarket, there’s no reason why this can’t be done more often.”
For now, customers were enjoying the savings.
“It’s all looking pretty cheap,” one happy shopper said.
“It’s good — I think these prices are great.”
The next step? To see if it can be done again in other parts of the country.
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