The Challenge of Increased Competition in the Grocery Industry: The Case of New World Supermarket

Introduction

New World supermarket is one of the leading supermarket chains in New Zealand, owned by the leading grocery supplying organization Foodstuff New Zealand. Established in 1963 as the first Foodstuff New Zealand’s supermarket brand, the supermarket chain has undergone a period of extensive growth and is now available in the major cities and towns in New Zealand (New World, 2016). However, the grocery industry in New Zealand has undergonea transformation over the past few decades, with more supermarket chains and non-traditional retailers entering the market (Clark, 2016). This means that New World supermarket now has to cope with increased competition, a fact that has emerged as one of the most significant challenges the company faces. For New World Supermarket to remain relevant in the New Zealand grocery retail industry, the company needs to come up with appropriate strategies to best address the challenge of increased competition

An Overview of New Zealand’s grocery industry 

The grocery industry in New Zealand is dominated by 2 players, namely Progressive Enterprise and Foodstuff New Zealand. Progressive Enterprises controls a total of 165 supermarkets spread across New Zealand. On the other hand, Foodstuff New Zealand owns three different supermarket chains namely New World, Pak ‘nSaveand Four Square stores.  The New Zealand grocery consumers are described as being one of the most price-conscious shoppers in the developed world.  As of 2010, the New Zealand grocery and supermarket industry was valued at NZ$16 billion (StuartAlexander, 2016). According to Euromonitor(2016), 2015 was a good year for the retail industry in New Zealand due to the positive growth the industry experienced. According to the Euromonitor report, Progressive Enterprises and Foodstuff New Zealand were the leading retailers of 2015, with grocery channels, especially supermarkets, contributing to the largest share of sales. This is a clear indicator that supermarket chains play an important role in the country’s retailing industry. The same report reveals that traditional channels such as supermarkets are facing increased competition from new entrants.

The significant change in New Zealand’s retail landscape has seen consumers become increasingly sophisticated, with many placing emphasis on value as well as a better and memorable shopping experience. The main players in the grocery industry have in the past…………………………………

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