Supermarket deal: Huckleberry and Woolworths

by | Sep 5, 2022 | News

In a joint press release organics grocer Huckleberry and Woolworths New Zealand announced their signs first wholesale deal, predicting more variety of products and lower prices for customers.

Organics grocer Huckleberry and Woolworths New Zealand (WWNZ) have announced the first wholesale agreement for WWNZ to provide a range of groceries to Huckleberry stores, with access to a greater product range at better prices cited as key benefits for Huckleberry’s customers.

This signifies a huge opportunity for smaller retailers to leverage the buying power that the Woolworths Group has with international suppliers, who simply don’t deal in smaller volumes or do so with a prohibitive price, reports Stuff. The New Zealand market is small by international standards and even larger Kiwi retailers experience challenges working with global brands, those difficulties are far greater for smaller retailers like Huckleberry.

Huckleberry has grown from a single small specialty shop to a leading health and wellness business with four organic grocery stores in the North Island along with a burgeoning e-commerce site. New owners 2121 Group took over the business in February 2022 and the company says it’s on a mission to provide customers with quality organic grocery options at more competitive prices. Darren Guo, Huckleberry Managing Director, said the government’s push for supermarkets to open up their wholesale channel was just the impetus they needed to get conversations started.

“Eating organic food shouldn’t be out of reach for anyone, which is why we strive to give Kiwi shoppers access to the organic options they want, at the most competitive prices. The partnership with Woolworths’ wholesale business is a big win for our customers as we can access a much broader organics range at better prices thanks to their volumes and scale”, says Guo. “It’s exactly what the industry and our customers need during this time of high inflation”.

Following the Commerce Commission’s market study into the retail grocery sector, and its final recommendations published in March, the government confirmed its expectation that the major supermarkets work to open up their wholesale channels.

In June, WWNZ called for early expressions of interest from potential wholesale customers and has since also set up a new business, New Zealand Grocery Wholesale, to focus on understanding the demand for groceries through the wholesale channel, negotiating with suppliers on aspects like price, volume and supply, working to set up the systems needed, and getting the business up and running.

Steve Sexton, WWNZ’s Director – NZ Grocery Wholesale and Local, said while the business isn’t able to provide wholesale supply at a large scale yet, getting this first agreement in place with a multi-store competitor like Huckleberry is important and shows WWNZ’s genuine commitment to encouraging more competition in New Zealand.

Sexton says: “We’re really transparent about the fact that currently, the whole WWNZ business is set up to service our Countdown, SuperValue and FreshChoice stores. Starting a wholesale business and all the complexity that brings isn’t an easy task – but we’re determined to get there. We’ve been working hard to get this agreement in place and we are confident it will be the first of many. We are a large retailer in the New Zealand market, but small by international standards, so we understand some of the frustrations that Huckleberry experiences in accessing range and good prices. We know that we’re in a better position to help provide that access than smaller NZ-based businesses, and we’re committed to doing that for the benefit of Kiwi consumers.”

“It’s going to need a bit of experimentation as we work through order quantities, demand, delivery and logistics, and test and learn so we can quickly scale for other wholesale customers in the future. We are currently in discussions with more than 50 retailers and other organisations who have reached out to us. The grocery sector is built around fast-moving goods and efficiency which does present challenges working with small, one-off retailers, but it’s our view that we can do this – and we’re giving it a really good shot to make a difference,” says Steve Sexton.

WWNZ’s New Zealand Grocery Wholesale business operates separately from Countdown, SuperValue and FreshChoice, with a different buying team having discussions with suppliers around products, supply and potential wholesale volumes.

“The support from suppliers is critical for wholesale to be a success,” says Sexton. “The government has been really clear that it wants to see wholesale opening up so we’ve all got to play our part.”

Image: L:Huckleberry managing director Darren Guo. R: Steve Sexton, Woolworths New Zealand (WWNZ) director of NZ Grocery Wholesale. / Supplied.

Retailers interested in accessing Woolworths New Zealand’s wholesale channels can register here

 

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