Foodstuffs plans to merge North, South Island operations

(Source: Foodstuffs)

Grocery retailer Foodstuffs has started the process to merge its North Island and South Island operations into one national cooperative.

Each cooperative will hold a special general meeting in June next year where members will vote on the proposal. They are also engaging with the Commerce Commission and seeking clearance to merge.

If the merger is approved, Foodstuffs South Island chair, Russell McKenzie, will chair the new cooperative’s board and Foodstuffs North Island CEO, Chris Quin, will assume the role of CEO-designate.

“If the proposed merger proceeds, we’ll continue to be a proudly 100 per cent NZ-owned cooperative with each store owned and operated by a local grocer. Their focus on delivering the best range and value for their customers will not change,” said McKenzie.

The change will help reduce complexity, duplication and additional cost, he continued, adding that the supply chain networks serving members and customers will remain the same.

“Combining the talent, expertise, and passion of our two cooperatives into a single, efficient organisation is the next logical step. It’ll ensure our cooperatives are in the best shape to keep improving for our customers and their communities,” said Dean Waddell, chair of Foodstuffs North Island.

Foodstuffs has 532 owner-operated stores throughout the country, with brands including Pak’nSave, New World, Four Square, and Gilmours in the North Island, and Pak’nSave, New World, Four Square, Raeward Fresh, On the Spot, and Trents in the South Island.

Foodstuffs North Island was itself formed by the merger of two cooperatives – Foodstuffs (Auckland) and Foodstuffs (Wellington) – back in September 2013.  

At the time, Foodstuffs North Island MD Murray Jordan said the merger would lead to better customer experience, more stores and associated jobs in local communities and that there were synergies in running off a single IT system and integrated back office functions.

Given there is no geographic overlap in the two companies’ operations it is unlikely the Commerce Commission will object to the North and South merger which will position the united company to compete on a more even footing with Australian-owned Woolworths Group. Woolworths New Zealand is currently converting its Countdown-bannered stores to its Australian brand identity.

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