Perspective with Ryan Bridge: Is Nicola Willis bluffing with the supermarket announcement?

I reckon Nicola Willis is bluffing - she's having a laugh. She's not really going to take a sledge hammer to the supermarkets.

She has threatened to do this, she's had consultants come and do some work on it, but she's not serious about doing it.

There's two main reasons as to why not.

One: Splitting up the brands like Pak N Save and New World form each other is a drastic action to take. It could affect hundreds of mum and dad-owned stores who run their own local supermarkets and form part of co-ops around the country.

Then there's the problem of prices - the fact that co-ops like Foodstuffs exist means they can spread their costs around the country and make prices more even between the regions. What happens to the price of Pams biscuits at Pak N Save Kawerau if it's split from its brother and sister stores? Does it come down or go up? 

If it goes up, so does Nicola's credibility.

Splitting retail land  from wholesale also risks creating a middleman to go between the two, thus pushing prices up anyway.

These are all arguments for why not.

There are also arguments for these, but at this stage they're not specific, they're just - prices are too high, so we'd better do something.

All that's before you even get political support for such a move - which wouldn't involve ACT - so it would need help from across the aisle.

I think, in the end, the risks will be too great and the benefits not clear enough for Nicola to smash the supermarkets to smithereens.

I also think she knows this and she's hoping the threat is enough to yield some results - and that it will go down well with the public, who are sick of paying through the nose for groceries every week at the checkout

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Episode Transcript

Speaker 1 (00:00):
I reckon. Nikola Willis is bluffing us. She's having a laugh.
She's not really going to take a sledgehammer to the supermarkets.
She has threatened to do this. She's having some consultants
come in and do some work on it, but she's
not serious about doing it. There are a couple of
reasons why not. Splitting up brands like Pack and Save
and New World from each other is a pretty drastic

(00:21):
action to take. It could affect hundreds of Mum and
Dad's store owners who run their own local supermarkets and
form part of the co op around the country. Then
there's the problem of prices. The fact that co ops
like food stuffs exist mean they can spread their costs
around the country and make prices more even between the regions.
What happens to the price of Pam's biscuits at Pack

(00:44):
and Save in Rotadua? If you split this store from
its brother and sister stores, does the price come down
or does the price go up? If it goes up, so,
if it goes up, then Nicholas's credibility goes down. Equally,
splitting retail from wholesale risks creating a middleman that goes

(01:04):
between the two thus pushing prices up. Anyway, these are
all arguments for why not, and there are arguments for four,
but at this stage they're not specific. They just prices
are too high, so we better do something. All of
this before you even get to the political support for
such a move, which obviously wouldn't involve the act Party

(01:25):
based on their comments today, so would need help from
across the Aisle. I think in the end the risks
will be too great, the benefits not clear enough for
Nikola to smash the supermarkets to smithereens. I also think
she knows this. She's hoping the threat is enough to
yield some results in the interim and go down well
with the public, who is sick of paying through the

(01:47):
nose for groceries every week at the checkout. For more
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