Christchurch retail startup Kai Co supermarket is challenging traditional grocery pricing with a new operating model that cuts out middlemen and sources directly from suppliers.

Founded by father-and-son team Shane and Ethan Vickery, the business was launched in response to inefficiencies they observed while managing retail operations within larger grocery groups.

“My dad and I have been managing retail stores for a while, and what we realised was that there were a lot of people clipping the ticket without adding value,” Ethan Vickery told 1News.

Rather than relying on centralised distribution centres, Kai Co sources much of its fresh food locally. Vickery said all beef and lamb sold in-store are sourced within 30 kilometres, and meat is processed on-site to reduce handling and logistics costs.

“We can buy direct from meat suppliers, which removes the need for that big middleman,” he said.

The store also does not charge suppliers for shelf space, a practice common among major supermarket operators. Kai Co believes this approach benefits both customers and producers while allowing the business to keep prices lower.

The founders say the model is scalable and could be replicated in other communities.

“If butcher shops and produce stores can sell cheaper than supermarkets, there’s no reason a full grocery store can’t do the same,” Vickery added.

Industry groups have responded cautiously but positively. Grocery Action Group member Gilbert Peterson said independent operators could influence pricing if the model were adopted more widely.

“One store won’t move the market, but if we had many more like this, it would start to make a real difference,” said Peterson.

Following its opening, Kai Co said customer demand has exceeded expectations, with strong foot traffic in its first weeks of trading. 

“We honestly can’t thank everyone enough for the support so far,” said the company. “A massive shout-out to everyone who came down, waited patiently, and braved the lines to check Kai Co out. It means more than you know.

The business added that additional suppliers have since made contact, with plans to expand the product range in the near term.

• Further Reading: How a public grocery chain would disrupt NZ’s supermarket duopoly