Source: Paddock to Pantry
9 October 2026
A $25 million expansion programme by an independent New Zealand grocery retailer is set to create up to 1,000 jobs and bring greater supermarket competition to underserved communities nationwide over the next five years, as the business sets its sights on becoming the country’s third-largest grocery retailer.
The company 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.
Paddock to Pantry, which recorded a 197% increase in sales over the past year, plans to open more than 20 new grocery stores at a rate of approximately one every three months, 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 would 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.
E-commerce currently accounts for around 90% of the company’s sales, but is expected to fall to approximately 33% within five years as its physical network grows.
The company will target communities underserved by existing supermarket competition, introducing the same competitive grocery promotional pricing across its stores regardless of location. The company says this will 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 $10 million in new retail stores, a proposed 5,000sqm distribution centre and an expansion of the company’s delivery fleet to 25 vehicles.
John Kennerley, Paddock to Pantry business manager, says 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.
He says 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.
“The groundwork has already been done through the changes to supermarket competition settings. Those reforms have opened the door for independent operators like us to compete, and we’ve demonstrated that the model works.
“We’ve already done much of the heavy lifting. We have the distribution infrastructure in place, direct relationships with the major grocery manufacturers and a pricing model that allows us to compete.
“Suitable retail sites are available, and we’ve identified locations where we believe there’s sufficient demand for another supermarket.
“Scaling from here is largely a matter of securing the capital to fit out stores, stock shelves and employ local people.
“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,” he says.
Kennerley says 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 says 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.
“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.
“We don’t necessarily need another major overhaul of supermarket competition policy. The existing settings are starting to work, 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.
“For a relatively modest financial commitment, the Government could unlock substantially greater private investment and bring meaningful competition to underserved communities much sooner,” he says.
Paddock to Pantry’s first new store will be a 500sqm grocery outlet in Kinloch, with larger supermarket-format sites planned for the East Coast and South Auckland.
The company is seeking sites ranging from 500sqm to 1,800sqm, 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 says 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% 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% of its purchasing by value directly from manufacturers.
Kennerley says 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.
“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,” he says.
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 says 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 5,000sqm 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.
“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,” he says.