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Bowden, S. (2012). NoshFoodMarket. Waikato Management School,The UniversityofWaikato, Hamilton, NZ. pp.1-21 .

nosh food market

Clinton Beuvink, glanced out the window of his sparse Greenlane office across to the Countdownsupermarket across the road. " It's not about being them ," t he Nosh CEO declared as he raced outthe door to his next meet ing in a hectic schedule. " It 's about being us. But there is a big opportunityout there and we th ink we've only scratched the surface. We have to cont inue to be smart in howwe operate, but we can absolutely grow th is business. We want to be 5% of the grocery business inNew Zealand - the same as Waitrose in England. But while it has taken them 100 years to get there,we want to get there a bit quicker - otherwise I'll be dead and I'd like to see it . So we will have to bea bit different in how we attack the market place."

THEORIGINS

The first Nosh store opened in Glen Innes, Auckland in 2006. Other Auckland sto res followed inPonsonby, Greenlane, Mt Eden and Matakana. In 2011 Nosh opened its first store outs ide of t heAuckland area in Hamilton . Beuvink set up the business afte r a career in Sales and Marketing forlarge multinationals. Returning from Australia, he felt there was an opportunity in the grocerybusiness in New Zealand and managed to raise the necessary capital from family and fr iends to startthe first Nosh store.

This case was specifically written f or the 32"d WMS Case Competition 2012 by Dr Stephen Bawden. Usef or any ath er purpose requires theexpress consent of the author. The assistance of Clinton Beuvink, Nosh CEO, is gratef ully acknowledged.

Beuvink's work for multinational suppliers to supermarkets had lead to a project which helpeduncover the opportunity. "From a supplier perspective you want competition across channels -options so you are not completely reliant on the existing huge supermarket chains," explainedBeuvink. "Additional supermarket competitors would be useful. However, supermarkets do tend tocompete in the same way - driving down price while also expecting suppliers to sell the productthrough their marketing and promotions. So other types of channels are potentially useful - vendingmachines being one good example. Vending machines are a good retail interface for instantconsumption. What Nosh represented was an evolving take home opportunity that satisfiedcustomers in a way that supermarkets could not. That offer was around better convenience andshopping for the day."

Supermarkets in New Zealand have a history of being very large stores and the buying patterns ofNew Zealand consumers being based around weekly or even fortnightly shops. Consumers havebeen encouraged to shop big and shop infrequently. "We are going the other way - shop for theday, shop for the occasion," noted Beuvink. "In order to do that you need stores locatedconveniently. We don't sell bulk packs of anything - we sell small packs for more immediate use - ameal tonight."

The early response to the stores was encouraging. "But you tend to get a wave of experimentationwhen any store opens," Beuvink explained. "Then a lot of customers will revert to their prior buyingpatterns and you have to win those customers back with the quality of your offer - rather than justnewness. So there's something of a 'valley of death' that can occur after the first couple of monthsfor any store which certainly creates challenges." Growth to date had been steady rather thanspectacular - so that after six years Nosh operated six stores.

FOOD RETAIL IN NEW ZEALAND

Food was big business the world over. Food retailing globally represented a US$4trillion industrywith global supermarketjhypermarket sales accounting for just over half that total and independentfood stores accounting for around 16%. According to Euromonitor, the top 15 global supermarketchains accounted for 30% of world supermarket sales. In Australia, the two largest supermarketchains dominated the industry - Woolworths and Coles. The global economic downturn had putpressure on the industry as "A key feature of the food business globally,whether it is in the retail end or supply is that it's a big to bigger game - scale drives nearlyeverything," commented Beuvink. "And the big supermarket chains are into everything and verycontrolling of their environment. Suppliers really are dictated to by the big retailers in consolidatedmarkets."

The supermarket industry in New Zealand had changed fundamentally in 2002 when the secondlargest chain, Progressive, acquired the then third largest chain, Woolworths, to create a duopoly.Previously each of the three players operated three brands in the supermarketjgrocery trade - asshown in Table 1, next page. Supermarkets had traditionally been a low margin industry the worldover with large volumes needed to generate significant profits.

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Table 1: New Zealand Supermarket Landscape (2001)

Group Corporate Owner Other Interests Chains Stores (#)

Progressive Foodland Associated Limited Farmers Foodtown 30(Aus) Deka Countdown 28

Wholesale 3Guys 9

Foodstuffs 3 Regional Co-operatives: On the Spot New World 110Foodstuffs (Auk); Foodstuffs (NZ); Pak'N Save 41and Foodstuffs (SI) Four Square 229

Woolworths Dairy Farm Int.1 Group Franklins (Aus) Woolworths 50(NZ) (Singapore) Wellcome (HK) Big Fresh 13

7-Eleven (China) Price Chopper 18

In 2005, purchased and have since consolidated downto a single brand of supermarkets in Countdown. Since 2009 Progressive have been gaining marketshare on industry leader moving from 41% in September 2009 to 45.5% in December2011. The New Zealand supermarket and grocery industry in New Zealand was worth $17.4B in2011 (see exhibits 1-3 for quarterly statistics). According to a 10-year study of 30 countriesconducted by the OECD, New Zealand recorded the second highest increase in supermarket pricesover the decadeof the 2000s, an increase of almost 43%. The competitive landscape forsupermarkets in 2012 is portrayed in Table 2.

Table 2: New Zealand Supermarket Landscape (2012)

GroupProgressive

Foodstuffs

Corporate OwnerWoolworths (Aus)

3 Regional Co-operatives:Foodstuffs (Auk);Foodstuffs (Wgtn); andFoodstuffs (SI)

Other InterestsDSE, Woolworths,Big W, Tandy, etcWoolworthsQuickstop & Micro

On the Spot,Liquor Land

ChainsCountdown

New WorldPak'N SaveWrite PriceShopriteFour Square

Stores (#)160

13649

32

281

Foodstuffs and Progressive operated with very different business models. Foodstuffs operated asthree geographically-based co-operatives under the brands of Pak n Save and New World insupermarkets as well as Four Square in smaller grocery/dairy formats. Progressive was acorporation owned by the large Australian retailer Woolworths. Having previously operated with

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multiple brands, Progressive had by 2012 reduced down to the single brand of Countdown for itscompany-owned supermarkets. Progressive was also the franchise co-ordinator for the Fresh Choiceand SuperValue brands in New Zealand.

The two big chains were very focused on each other. In 2012 both were still engaged in majorrevitalisation programs that involved some new store development as well as more significant storerefurbishment programs. They both had also invested heavily in upgrades to their centraliseddistribution systems. The result was very significant capital spend.

But the big capital spends were only part of the story of competition among supermarkets. Theoperation of supermarkets had become increasingly complex to extract every last dollar out ofconsumers. Colours, lighting, and music were all used in subtle ways to encourage purchase.Progressive had access to a consumer lab that parent Woolworths opened in 2011 in Australia tostudy buyer behaviour. The introduction of the OneCard into Countdown stores allowed the analysisof customer buying behaviour data on a scale unprecedented in New Zealand. Pricing andpromotions were an important part of the package of appealing to customers, although there hadbeen recent cases of deceptive practices found. A more detailed explanation of the competitivetactics used by the big chains is available in Exhibit 4.

While Foodstuffs had gained market share at the expense of their rival throughout the 2000s,Progressive had begun reversing the trend since 2009. Progressive had also been consistently raisingtheir profitability over that period as they consolidated to a single brand, became more assertivewith their supplier base and leveraged the capabilities of Australian parent Woolworths. Foodstuffshad traditionally paid less for their product than Progressive. This was despite Progressive buyingcentrally in a corporate structure and Foodstuffs allowing individual stores to negotiate pricesdirectly with suppliers. Progressive had become better at extracting better deals based on theirscale of purchase.

Table 3: Progressive Enterprises Financial Results (Latest full and half year)

NZ$Sales (m)Gross margin (%)CODB (%)EBITto sales (%)Reported EBIT(m)Funds Employed (m)NZ Food Inflation (%)

Source: Woolworths (Australia)FYE:June 30

FY105185

22.2717.564.71

232.22,995.5

0.9

FYll5362

22.6417.934.71

244.13208.7

1.4

Hl-ll2795

22.4117.444.97

134.33211.8

0.6

Hl-122879

23.0217.75

5.27149.1

3364.71.7

The reaction of the big players to Nosh was changing according to Beuvink. Their initial reaction hadbeen curiosity - "probably because they didn't think our model would work. Now there is probablya bit of respect that we're still around and maybe even starting to view us as a threat - particularlywith the milk thing. Certainly their number one weapon is price. Anything offered they tend tomatch on price. Step number two is to take away points of difference - and that generally meansmatching the product range."

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Grocery

On a smaller scale, both in terms of numbers and store format, were Grocery stores such as Nosh,____ and Farro Fresh operated three stores in May 2012, two in Aucklandand one in Hamilton. Farro's second store in Mairangi Bay had won a Theemphasis from Farro Fresh was on support for Artisan New Zealand producers. The Hamilton store,after poor trading, had been remodelled as a concept store in early May 2012 and was trading underthe name at the Te Awa mall. The emphasis of Trader Jacks was on value. HuckleberryFarms opened their third physical store in Auckland early in 2012. The Grey Lynn store operatedunder the trading name of Harvest Wholefoods. Established in the 1990s, Huckleberry hadconsistently emphasised natural and organic foods. Every product sold by Huckleberry in 2012 wasfair trade.

Asian supermarkets had also become more prevalent in the New Zealand grocery market. Selling awide range of produce, but with a clear emphasis on Asian food items frequently unavailableelsewhere, these stores tended to operate with an emphasis on price. The increasing proportion ofAsian customers in New Zealand was a factor in growth, but so too was a broadening of interest inwhat might have traditionally been seen as exotic foods by mainstream New Zealand.

Specialty

In the New Zealand Yellow Pagesdirectory were listed 487 specialty butchers, 945 Bakers, 128Delicatessans, 204 Fish shops, 346 Fruit and Vegetable shops, and 212 Fruiterers and Greengrocersin May 2012. The biggest chain of butchers, who tended to emphasise price, was The Mad Butcherwith 36 stores nationwide. Australian-owned franchise Bakers Delight was the biggest chain ofbakeries with 33 stores nationally. Broadly though, the majority of specialty food retailers wereindependent operators who traded from a single store.

As Beuvink explained, "Scale works brilliantly in packaged goods. Progressive might order a truckand trailer of baked beans (29 pallets). They can put those cans into a central distribution point andthat is the cheapest way you can get baked beans. But if you are a small supplier of broccoli in NewZealand, for example, you actually cannot supply the big chains. You just don't produce enough tosell to the big supermarket chains who want consistency of supply. Instead the small player just sellstheir produce at the market each day and takes what they can get there. In fact the big chainsforward purchase a lot of their fruit and vegetables to ensure that consistency of supply at a setprice - which can be more or less than the market price on any given day depending on the supplyand demand fluctuations that affect market prices."

Markets

Farmers Markets had emerged in the 2000s throughout New Zealand as something of a showcasefor locally produced food. Markets varied in the nature of rules that they applied to the approval ofvendors. Rules included that produce might have to be grown locally on land owned by the vendor.Some markets required that produce be organic or free range. Typically Farmer's markets operatedon one day per week - usually on the weekend - and provided a venue for direct interactionbetween producers and customers without a retailer.

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NOSH IN 2012

International models that influenced Nosh included in the UK and in the U.s.However, neither was a perfect model for the New Zealand market, there had to be tailoring."Whole Foods, for example, are strongly organic - and that just doesn't work as well in NewZealand," suggested Beuvink. "It may be the lack of relative disposable income or perhaps eveninterest in New Zealand for a Whole Foods concept to work, but we don't see evidence that a lot ofthe market cares a great deal about organic or free range. Unless the premium is very small theanecdotal evidence is that New Zealanders won't switch. There is a very small group who areabsolutely driven in their purchasing decisions by moral issues, but they are a very small minority inour experience. After twenty years Huckleberry's have just opened their third store."

"The irony is I really believe in organics, free-range and fair trade," continued Beuvink. "But my jobas a retailer is to supply what people want to buy - not to dictate moral choices to customers. Wedo more in a store like ours to accentuate those products than the big chains because it suits part ofour customer profile. But it can only be part of our story."

The target market for Nosh was any and every consumer, "but we are probably better with peoplewith more sophisticated eating behaviours and we are probably not as strong for large families withlimited budgets," described Beuvink. "Pak n Save does a really good job at that end of the market. Ihave a young family and my wife shops at either Pak n Save or Countdown because there areproducts we don't sell that kids need. We only sell more expensive ice-cream for example - it'spointless giving that to kids. We do better with people who have a strong relationship with theirfood - which doesn't mean you have to be rich. A lot of foodies are in fact not well off - so whatthey do is spend their money wisely. And that is in fact what we encourage our customers to do. Itis wise to purchase for the day and to not waste food. We emphasise good quality food eatenfresh."

Farro Fresh and Nosh were often perceived as quite similar. But Beuvink argued that Farro Freshand Nosh were both rapidly evolving brands and "probably going in opposite directions." Evenwithout the term 'fresh' in the company name, Nosh heavily emphasised fresh "and we would argueit as a strength. Even our discounting is very oriented toward fresh food." Farro focused on Artisanproducers of New Zealand. "If you have a particular product you need for a specific recipe Farro willtry to service that need - by tracking it down and getting it in for you," remarked Beuvink. "Wedon't. We will run a smaller store than them but probably have a much higher turnover. We don'tset out to supply people with every weird and wonderful ingredient they can think of. We focus onthings that can sell."

Many people have a love-hate relationship with food shopping. For a lot of people getting groceriesis a chore that needs to be done. According to Beuvink, "most people hate supermarket shopping,but most people love shopping at Nosh. We need to keep that love affair - and maybe a real issuefor us in the future is that if we became more mass market would we risk that relationship. Whenyou are small and niche - then you're the little guy and everyone loves you. "

The business model was to be an alternative to the supermarket for a certain proportion of acustomer's shop. So even where there might be both a Countdown and a New World located in anarea - that won't necessarily deter Nosh from locating there. In fact, it may well represent enough

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of a concentration of the right customers for Nosh to be able to fit with their particular offer.Beuvink did not seek just affluent customers, however. "I want people who are savvy around food,"argued Beuvink. "But we have to be convenient. That's the number one rule of food retailing. Iwant customers 3 times a week. You need to buy fish for that day. There are also products that wecan be the best value in town. We import a lot of products and we are the lowest-cost producer ona number of lines because we are the main importer. So if you want to get the best value on Frenchcheeses like camembert or brie - we will have the best deal in town. We aren't going to specialwatties baked beans - it would be pointless because the big guys would easily respond to it andthey'd be able to undercut us with their volume. Instead we want people to top up with Nosh.There is more involvement with the top-up than with the basics and we don't need masses of peoplecoming through the stores for us to work." But Nosh did need ...

Stores

"The cost of building and populating stores is really significant," explained Beuvink. " To build aCountdown like the one across the road in Greenlane would cost around $30m. You really needdeep pockets to play that game - because, of course, one store is really no good to you. When Aldi,the German chain, entered Australia they went very quickly up to over a hundred stores in order toget a critical mass to go against the big players in Australia, Woolworths and Coles. But putting halfa billion dollars of capital into a market is not something we could contemplate."

Nosh did not build stores themselves. "There is no need and we are not in the property game,"concluded Beuvink. "I get phone calls every day from property developers and agents with potentialsites for us to use. There isn't a shortage of property - although there can be a shortage of suitableproperty. A lot of it has no fit at all with us." Leasing costs varied by location as well as the nature ofthe property. The Greenlane store was very rundown so required a lot of upfront investment to getup to Nosh standard, but leasing costs were lower as a result. Other sites required less investmentup front, but the leasing costs were higher. The set up cost of a Nosh store was around $1.5mincluding working capital, staff training, shop fittings, plumbing and electrical and inventory. If Noshtook over a comparable site from another grocer then set up costs would be substantially lower.

"The size of store we use right now works for us," claimed Beuvink. "Our ability to operate biggerstores would depend on our ability to interest our customers in a bigger range of products. So, whatwe do today works - but where we go in the future with formats is more open. Maybe we could bethe size of the big guys in time, but for now our focus is on our core business - and smaller is betterunder that business model." The size of store also impacted on ...

Locations

Choosing locations was not an exact science - though there were clear criteria that Nosh used. "Insome cases Nosh used a lot of research on houses in an area, lifestyles and psychographic data,traffic flows and more. Sometimes it was more obvious though - "we really didn't need a lot ofresearch to figure out that Ponsonby would work," confided Beuvink. The clientele at Nosh'sPonsonby store was younger than other Nosh stores, had typically travelled and enjoyed the moreexotic products Nosh carried. Identifying a location in Hamilton was more difficult because of thespread out nature of the town. With a model built around convenience, that spread was especially

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problematic. In addition available research tended to be built around an urban market - raisingquestions of relevance. JJ

"Hamilton may have been our most challenging store to date," stated Beuvink, "and it was the one Iwondered if we had made a mistake on We hadn't and it is trading well after getting through thevalley of death. But clearly we had to build up brand awareness from scratch in Hamilton. Cost toservice the store is also a little bit higher in Hamilton as we spread our footprint from logistics costs.The added distance also just makes it that little bit harder maintaining managerial oversight."

Hours were different for each Nosh store depending on the needs of the local market. "TheHamilton store, for example, closes at 6pm because the CBD is essentially empty by then," explainedBeuvink. "Traffic dies off after that. In our Ponsonby Road store our busiest time will be 5-7pmbecause that is the nature of that market. Ponsonby is an area in New Zealand where there is realurban living that reflects international trends towards smaller living spaces and more frequent shopsas a result." More stores and more hours meant more ...

Staff

Service levels in New Zealand supermarkets were generally low - at the checkout and often not a lotmore. "Even at a big deli counter they can have just one person working," noted Beuvink. "At ourNosh stores you will find two or three people working at the counter on much lower volume. Theirlabour costs compared to us are just a fraction because they have so few people compared to theirturnover. Similarlv, even at head office the big chains have a really efficient operation with arelatively small number of people overseeing a massive operation."

Nosh were regularly approached by people interested in working there, but they also upskilled staffinternally. People were attracted to the Nosh environment. "We are smaller and more personalwith customers interested in the product and staff interested as well - there is a passion for foodthat comes across," identified Beuvink. "We don't necessarily need to have large numbers of staff toprovide great service, but we do want our staff to be expert so that they can really engagecustomers. Certainly to begin with it was harder getting people who had supermarket experience towork for us because we were only one or two stores. But we have lasted a while and grown sopeople are beginning to see us as a career option." Customer retention was also encouraged byNosh through ...

Marketing

Nosh introduced their VIP card in 2011 to encouraged loyalty. "We have a brand that people don'tmind carrying around in their wallet," commented Beuvink. "You might get the odd comment thatyou are earning too much if you shop at Nosh, but the brand certainly has positive connotations."The card allows the tracking of customer purchases - the same as Progressive use with the OneCard."But it also means that we have an invitation to communicate with our customers in the mostefficient way - electronicallv." In 2012 Nosh still produced physical mailers that were delivered tohomes in close proximity to their stores. Mailers allowed a very data-rich communication withpotential customers far more efficiently than other advertising mediums. "But we would not expectto continue to deliver mailers in the long-term - we would like to transition that to an electronicplatform." Nevertheless, mailers were still the critical means in 2012 for showcasing the ...

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Product Range

The big supermarkets had very strong relationships with suppliers - to the point where supplierscould be concerned about supplying Nosh for fear of a potential reaction from their biggestcustomers - Foodstuffs and Progressive. Nosh, therefore, faced restrictions in terms of how theycould compete with the big guys. "Under, over, around - anything but head on," mused Beuvink."We put through good volumes from our stores and we are geographically tight so our cost toservice for suppliers is pretty low. So what we really try to get from suppliers is transparency. If wedon't sell much of a product I don't expect to pay the same price as the big guys."

"Our product range has to be better than our competitors - it can't be the same," contendedBeuvink. "It also can't be much more expensive - we have to remain price competitive. It is unlikelythat we will ever sell toilet paper, for instance, because we can't do it in a way that would becompelling. The big chains can bring that in extremely efficiently and there is no real point ofdifference we could offer at present - so we will only be a part of a customer's grocery shop. But,having said that, toilet paper is big volume product that takes up a lot of space on the shelves and islow margin - even the supermarkets don't like selling it, but they have to."

Nosh was quite a seasonal business so the exact mix of products varied throughout the year. Noshhad around 5,000 individual product lines (SKUs) in their system as active products, but a goodproportion of those would not be on shelves at any particular time due to seasonality. Thesupermarkets might have 20,000 SKUs. But even with 5,000 SKUs, inventory was a huge challenge.Salesvaried depending on the weather and seasons whilea lot the product was perishable. Productbrought in, therefore, had to match product sold or wastage occurred which had a big impact onprofitability. Nosh operated with little storage on-site using a just-in-time system predominantly.The Countdown supermarkets operated quite similarly with the bulk of food coming in as neededfrom suppliers, whereas Pak n Save used more warehousing. The product range itself had beenenhanced by the ...

Waitrose Alliance

Nosh formed an alliance with Waitrose, the UK supermarket chain in 2011. The alliance begansimply because Nosh asked the question. "We called up Waitrose and asked if they would beinterested in supplying us," smiled Beuvink. "They said yes and it's been great. They have 300 oftheir own stores in the UK and we have provided six more outlets for them here in New Zealand."

Waitrose was a very experienced operator who had good relations with a large number of suppliers.Already buying a large amount of product for their stores in the UK, Waitrose could get better pricesthan Nosh would have been able to and had a large enough team to deal with all those suppliers.The prices that Nosh accessed through Waitrose were cheaper than the big supermarkets in NewZealand could purchase those lines using a distributor. "The alternative is I could go over to France,potentially learn French, and try to establish relationships with cheese suppliers in order to get insome really excellent Brie and then I would still have to set up a system of quality control to makesure we are getting want we want," contended Beuvink. Or we can work with Waitrose as part of alarger relationship and utilise the fact that they have already established relationships, are close byand have excellent quality control systems set up."

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For Nosh, the relationship also represented an opportunity to secure their supplier lines. By dealingwith Waitrose, Nosh had removed middle men who would sell to Nosh but would also be willing tosupply anyone else. "Under the middle man scenario we can be the launching platform for peopleto sell into the bigger supermarkets in New Zealand. We've learnt first-hand the peril of thatapproach. You put in the effort of bringing people into New Zealand and end up doing the work ofthe big chains for them."

Through Waitrose, Nosh had access to Waitrose branded products (private label) as well as otherbrands that Waitrose sold. One of the ways that Waitrose had grown share in the UK was through awell thought out approach to their own Waitrose brand. Private label in New Zealand through Pam'sat Foodstuffs or Homebrand and Select range at Progressive was very big business - but it was alsounimaginative. "The private labels here just do direct imitations of products from existing suppliersthat work. Waitrose, by contrast, looks to do things differently. For example, Cerebos range ofherbs and spices are sold in Waitrose, but the Waitrose branded herbs and spices are organic - so itis not the exact same product in a different package. Rather than discouraging supplier innovationby copying any new product developed, Waitrose encourage innovation." Partnering with Waitrosewas a critical driver of difference for Nosh, with an impact on ...

Pricing

The setting of prices involved a combination of factors - costs, demand and competition to namethree. "If I could index to Countdown I probably would but that's not always possible," explainedBeuvink. " Sometimes I can be way cheaper, sometimes I can't be as cheap. Our system is very muchline by line. We don't check competitor prices specifically - but if you are in the industry you dotend to know what prices things are generally going for." Exhibit 5 shows a price comparisonbetween Nosh & Countdown.

Specials were often about what could be done. In a fresh context - if there was an abundance ofsomething that would mean a really good price at market and, therefore, the opportunity for Noshto special that item. With forward purchase at set prices and promotions set up in advance, the bigsupermarket chains were not always able to respond. One promotion that gained a lot of attentionfor Nosh in 2012 was ...

Milk

In February 2012 Nosh reduced the price of a 2 litre bottle of milk to $2. It represented a price cut ofmore than 50% for Nosh and while Mill St Pak n Save in Hamilton (across the road from Nosh)initially responded both large chains issued statements to the media that they would not beresponding. The milk was initially supplied by Cow & Gate, who were owned by Goodman Fielderand supplied by Fonterra. "There are a few areas in a supermarket that are absolutely key toprofitability and milk is one of them," explained Beuvink. "The margins give you scope to attack, butof course it inflames and enrages them, so I need to be very careful about that. The saying is 'don'tprod the gorilla,' and one person told me we were electrifying the gorilla with the milk deal - so wedo have to be careful. Having said that, it's not like they've been friendly up until now anyway.Anything they can do to make your life more difficult, they do already. So, ultimately the focus hasto be on building your own brand. The milk offer has allowed a lot of air space to do that."

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The initial promotion had subsequently been replaced by Nosh partnering with Green Valley tobottle milk under the brand Nosh Essentials. Pricing has been increased to the break-even level of$2.49 as Beuvink promised the market he would do. Green Valley were fully integrated - so theywere not reliant on Fonterra for milk supply. Fonterra had not been supportive of Nosh's plans formilk. Green Valley also did not have pre-existing relationships with the big chains that could bethreatened. "People struggled to understand the motive behind our move on milk," argued Beuvink."But there is a philanthropic aspect to what we have done. I want my kids to drink milk and I wantother kids to drink milk and the price of milk is just too high. The argument from the industry wasthat we were devaluing the category - but we just wanted to encourage consumption among agroup who should be drinking milk. Milk is a unique product because you don't have options. If youdon't like the price of lamb, you can buy chicken or pork - but the alternatives aren't the same formilk."

"When we priced at $2 for two Iitres of milk we were losing money on each bottle and we lost a lotof money as a result because volumes took off, laughed Beuvink. "It actually went way better thanwe expected - so we lost a fortune. We wanted to change the market - but we were accused ofusing it as a gimmick. The big guys just wouldn't play and so did not change their prices. We wereprobably a little naive in thinking they would respond."

The price of milk at Nosh had certainly meant more customers through the door. A commonstrategy globally in supermarkets was to offer core products like bread or milk at a loss or close to it(loss leaders) to drive traffic. Margin was recovered by the sale of other profitable lines as part of atotal shop. "We certainly don't get customers buying our other products based on any goodwill inregard to milk," argued Beuvink. "They only purchase products from us where the offer is attractive.More people are at least seeing the offer - but it is hardly a gimmick."

THE FUTURE

The goal was clear - 5% of the New Zealand market - but the timeline was a little less so and thepathway to achieving that goal more open still. The one thing Beuvink knew was that Nosh neededto maintain a point of difference and an intimacy with their customers. He pondered "How do wegrow so that we don't just become another supermarket chain?

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Exhibit 1: NZ Quarterly Retail Sales by Industry

Actual retail sales!"By quarter by industry

Series 2009 I 2010 Iref: Dec I Mar I Jun I Sep I Dec I Mar

Industry RITQ $(million)

Supermarket and grocery stores SlAAC 4}251 3}978 3}861 3}979 4}415 4}212Specialised food SlABC 334 311 306 307 342 325Liquor SlACC 382 309 300 288 365 296Non-store and commission-based retailing SlAEC 256 150 151 148 207 186Department stores SlAFC 1}181 830 890 832 1}146 795Furniture} floor coverings} houseware, textiles SlAGC 475 399 430 446 439 388Hardware} building} and garden supplies SlAHC 1}231 1}113 1}126 1}159 1}243 1}089Recreational goods SlAJC 605 475 398 409 567 455Clothing} footwear} and accessories SlAKC 921 773 866 771 985 822Electrical and electronic goods SlALC 719 565 593 655 683 587Pharmaceutical and other store-based retailing SlAMC 1}162 1}049 1}047 1}068 1}176 1}061Accommodation SlAUC 636 780 563 594 673 774Food and beverage services SlAVC 1}729 1}643 1}535 1}581 1}735 1}689Core industries total 51A1C 13,882 12,376 12,066 12,239 13,976 12,679Motor vehicles and parts SlAPC 1}806 1}877 1}978 2}025 1}858 1}968Fuel SlAQC 1}646 1}712 1}682 1}590 1}756 1}855All industries total 51A9C 17,334 15,965 15,726 15,853 17,589 16,502

Source: NZ Statistics

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Exhibit 2: NZ Quarterly Retail Sales by Region

Actual retail sales!"By geographical region

North Island South IslandAuckland Waikato Wellington Remainder Total Canterbury RemainderRegional Regional Regional of North North Regional of South

Council area Council area Council area Island Island Council area Island$(million)

Series ref: RTT SlARA9C SlARB9C SlARC9C SlARD9C SlARG9C SlARE9C SlARF9C

Quarter2007 Dec 5J593 I J533 I J807 3J955 12J888 2J176 2J0612008 Mar 4J981 I J436 I J689 3J776 IlJ883 2J041 2J027

Jun 4J845 I J349 I J682 3J571 IlJ446 I J964 I J778Sep 4J883 I J397 I J699 3J608 IlJ587 I J933 I J800Dec 5J323 I J552 I J856 3J921 12J652 2J227 I J978

2009 Mar 4J656 I J362 I J585 3J489 IlJ093 2J176 I J834Jun 4J884 I J383 I J610 3J423 IlJ300 I J918 I J768Sep 5J007 I J398 I J581 3J624 IlJ611 I J915 I J814Dec 5J726 I J594 I J751 3J974 13J045 2J200 2J088

2010 Mar 5J154 I J502 I J609 3J676 IlJ940 I J972 2J053Jun 5J236 I J499 I J703 3J394 IlJ832 2Jl18 I J776Sep 5J336 I J500 I J760 3J414 12JOI0 2J081 I J763Dec 5J966 I J659 I J904 3J808 13J336 2J330 I J923

2011 Mar 5J490 I J600 I J766 3J578 12J433 2J146 I J923Jun 5J537 I J571 I J833 3J443 12J384 2J182 I J799Sep 5J737 I J537 I J841 3J632 12J747 2J204 I J894Dec 6J535 I J814 2J073 3J984 14J406 2J477 2Jl19

Source: NZ Statistics

13

Exhibit 3: NZ Quarterly Stock Levels by Quarter

Actual retail stocks at end of quarter!"By industry

Series 2009 I 2010 Iref: Dec I Mar I Jun I Sep I Dec I Mar I

Industry RITQ $(million)

Supermarket and grocery stores S2AAC 599 608 578 594 649 631Specialised food S2ABC 44 44 46 43 44 51Liquor S2ACC 173 152 156 142 167 146Non-store and commission-based retailing S2AEC 85 83 66 85 72 79Department stores S2AFC 609 651 615 690 717 689Furniture} floor coverings} houseware,

S2AGCtextiles 268 255 260 247 261 252Hardware} building} and garden supplies S2AHC 741 753 742 739 783 745Recreational goods S2AJC 443 410 434 441 458 418Clothing} footwear} and accessories S2AKC 633 657 639 655 705 699Electrical and electronic goods S2ALC 393 345 358 366 383 338Pharmaceutical and other store-based

S2AMCretailing 528 503 484 480 522 477Accommodation S2AUC 31 32 32 34 35 32Food and beverage services S2AVC 108 108 108 108 117 117Core industries total 52A1C 4,656 4,601 4,517 4,625 4,915 4,674 4,!Motor vehicles and parts S2APC 1}006 1}082 1}185 1}183 1}250 1}259 1}.Fuel S2AQC 94 83 82 79 98 104All industries total 52A9C 5,756 5,766 5,783 5,888 6,262 6,037 5,!

Source: NZ Statistics

14

Exhibit 4: Supermarket Wars

DOMINION POST- 03 DEC 2011 Edition 2, Page 1

WARS

By: DASTGHEIBShabnam

Behind the major sit two rival companies at constant war. Their mission is simple: to turn every shopper intoa buyer. But the weapons used to entice purchasers are growing increasingly complex as the giants vie formarket share. Shabnam Dastgheib reports.

FRESH produce glistens beneath temperature-controlled water vapour, its green colour calming unsuspecting shoppers toput them in a good mood.

Generic easy-listening harmonies sound gently from surround-sound speakers in a bid to make customers linger in theaisles. The in-store television screens announce the latest specials - some below wholesale cost.

Cut-price bottles of wine lure shoppers to the booze section, their mark-downs too hefty for many to pass up. Suddenly thequick dash for a loaf of bread is derailed by the bakery section's sweet delights, or numerous special offers or"two for one" deals that pepper the aisles.

Nothing in a is positioned accidentally. Shoppers are surreptitiously bombarded with an array of cunningploys designed to put more items in their trolley.

The science of retail design has become an intricate artform as the country's duopoly battles each other forbusiness. Progressive Enterprises owns Countdown, while Foodstuffs owns Pak'n Save, New World and Four Square.Competition between the two companies is heating up, with each side hungry for more customers and greater revenue.

However, experts say the battle for more shoppers will probably not lead to price cuts.

Last week, the Advertising Standards Authority urged the two companies to work together to self-regulate comparativeadvertising after ruling that Progressive had misled its customers on pricing. Progressive claimed Foodstuffs had usedsimilar tactics the year before.

Both sides acknowledge the intensity of competition with Foodstuffs, likening it to the "Bledisloe Cup of CII i",\ Q I"' I"'n ":l I"' V l:'I+C"

Wellington branding expert Jonny Mole, chief executive of Chilli Marketing, doesn't think consumers will benefit from thecompetition.

"I don't think there is a huge potential for price competition. It's not like you have a whole range of brands competing.

"New World have refreshed their brand. Countdown have refreshed their overall brand and it looks like they are bothgearing up to go for loyalty. Progressive made a pretty proactive step to directly compete with New World, they havebasically given up on Pak'n Save.

"They have recognised that to compete directly they need one strong brand. I think the competition is definitely going toheat up between the two."

15

Progressive Enterprises' parent is Australian company Woolworths, and it owns every Countdown store in the country, aswell as about 3000 stores across the Ditch. Last month, Progressive finished consolidating its brand and the final Foodtownand Woolworths stores were phased out, leaving only a newly revamped Countdown behind.

Competing with Progressive is Foodstuffs, a New Zealand-owned co-operative which owns Four Square, New World andPak'n Save.

The increased competition means each will have to work harder to woo shoppers and persuade them to partwith their money. The Wellington region will soon be a battlefield - seven new are planned -with shoppers caught in the cross- hairs.

Foodstuffs is to open new in Churton Park, Newlands, Mt Cook and inner-city Ghuznee St while ProgressiveEnterprises is building a Countdown in Newtown, one next to the Tawa motorway turnoff and has the greenlight for a new Countdown in Petone, almost opposite rival Pak'n Save.

New World Porirua has just undergone a major refurbishment which Foodstuffs says is just the beginning of a widerdevelopment programme in Wellington.

Consumer chief executive Sue Chetwin says: "Normally when you get competition it is good for customers but in somerespects when you get competition and it is a duopoly, this can act like a monopoly. It will be interesting to see how that isgoing to work."

A retail design expert and director of Design Environments, John MacDonald, has been in the business for 50 years,designing smaller food outlets and clothing stores. He says he is blown away at the rate of new developments and change.

"You can't get control of itat the moment. But the principles are still the same as when I began - shops present product inthe most positive light to encourage purchase."

The positioning of each product is a science but it comes down to more than just shelf placement.

"Music comes into it. Sound levels are often increased as the place gets busier. This is all automatically worked out. Thelight level increases automatically so that it is brighter at the right time of day. The five senses are coming into it, smell is asimportant as anything ... and the greens at the front are there to have a calming uplifting effect on you so you lingerlonger."

Mr MacDonald says are trying hard not to lose customers to online shopping by making the experience moreenjoyable. It would take about a year to come up with the ideal plan and each company has dedicated teamsto do this for them. "If you go instore and you can smell things and taste things, that will make the impulse purchase."

Foodstuffs says the key to turning shoppers into buyers is "having great staff, friendly service, and a strong relationshipwith the local community and suppliers".

Progressive points to bigger stores, more in-store demonstrations and new products. But marketing analysts and consumerwatchdogs say the tried and true methods of lulling consumers into spending instore go much further.

Oblivious shoppers are led down aisles of perfectly arranged products and colourful special displays accented with theperfect lighting and music designed to slow them down.

\':ll r"\ OI"'I"'n ':l ,I"' V l:llt" music is often easy-listening to relax customers. Progressive says it plays "a broad cross-section of lightmainstream music that is intended to add to the ambience of the shopping experience", while Foodstuffs claims eachstore's music choice will reflect the local community.

Australia's consumer watchdog, Choice, says shoppers are heavily influenced by instore displays even if special offers arenot actually good deals. Shoppers might find themselves lingering over buy-one-get-one-free toiletries when they onlymeant to pick up a few stapies.

Consumer warns shoppers not to be lured in by the attractive specials displays as the 'great deals' can be on the moreexpensive brands. Items on special are sometimes products nearing the end of their shelf-date.

16

Multi-unit pricing - such as "three for three dollars" or "limit of three per customer" is a winner - and this technique candrive up sales. know most shoppers make decisions instore. Many shop without a list and the person makingthe list and the shopper are not always the same person.

Products that want to promote, such as best- sellers or the own brands, are placed at eyelevel. Staples such as flour and sugar are down low as customers have no choice but to bend down.

Confectionary, sweet and cereals are also often at ground level as the big companies know what every parent is aware of -children make the best shoppers.

Colour is carefully used to evoke certain feelings in the shopper. Red demands attention so is used for the discounts anditems on special. Green conveys calm, freshness and health, while blue releases trust hormones.

Yellow is a common colour in food packaging and signage as the golden shades can stir up feelings of hunger.

Shoppers usually dip in and out of aisles while staying around the outside perimeter, and this is where the most visuallyappealing stock is on display - the plump and creamy muffins, the tempting spreads and cheeses, the brightly lit-up delimeats.

Year after year, adopt new techniques to tempt the unsuspecting customer. Some are tried and true, likepromoting specials at the end of aisles - people walk slower in these areas as they manoeuvre the trolley around, and oftencan't help but glance at the lively displays.

'I I i'""lOI"'i"Y'l ':l Ir vo,tc also make sure to place staples such as milk and bread as far inside the store and as far apart as possible.Shoppers who walk past rows of product will spend more.

Foodstuffs Wellington general manager of brands George Sutherland says the competition is healthy and keeps thecompany on its toes. He denies suggestions any elements of Foodstuffs design are designed to dupe peopleinto buying products they don't want. "If we did, our stores would be very empty very quickly."

Progressive spokesman Luke Schepen says the retail landscape in New Zealand is extremely competitive and retailers arefighting it out for every shopper's dollar.

lilt's never been more competitive. People will always have different theories around the waybut we work to what is best for our customers."

are designed

Mr Schepen says the basics of retailing haven't changed but there have been subtle alterations over the years. Countdownstores are now using more in-store tastings and promoting combo deals.

"People still want a nice place to shop where things are cheap. For example, the biggest individual product specials arelocated at the end of the aisles. This is prime real estate for the biggest promotions.

"There are also other types of specials such as 'combo deals' where a customer might be able to pick up a pasta and pasta-sauce deal for a great price."

These combo deals are in every and help drive up sales of both products. For example, chips are placed nearthe dip or the French onion dip with the reduced cream, tea and coffee are normally near the biscuits and so on.

Mr Schepen says retailing is both an art and a science. "We have around 25,000 products in the average andthe placement of products simply goes on what our customers buy. That's why we have more breakfast cereals than lemonessence, for example."

Mr Sutherland says the most important factor in turning shoppers into buyers is constantly improving operations throughfeedback from customers and staff. Reducing wait times at checkouts is critical and international trends are alwaysmonitored.

"We know customers are happy to spend extended amounts of time browsing but a wait at check-out can transform apositive shopping experience very quickly into a negative one."

17

In the future, spending will be even easier. For transactions under a certain amount, credit or debit cards can be tapped ona card-reading device, so customers do not have to sign anything or enter a pin number. Smartphone barcode scanningapps let shoppers compare prices and also to ask friends in their network about the quality of a product.

VIP Trolleys have been on trial in Australia. These feature a computer, video screen and GPS navigation. The trolleysautomatically scan and calculate the total cost of items as they're placed in the basket. The trolleys can take customers tospecials or shoppers can upload recipes and be taken to the relevant products.

Foodstuffs says it has its eye on new technology, though it is relatively unproven at this stage. Progressive says there are nofirm plans to bring the technology to New Zealand.

Victoria University marketing senior lecturer David Stewart admits that even though he knows all the tricks, he stillstruggles to emerge from a expedition with just the items he went in for. "People who go with a shopping listspend less than those that don't, So if you can go in with a shopping list and say, 11 111 have the sardines, the toilet paper andthe margarine and nothing elsel then you're doing well. I know I struggle to just pick up the one item."

"Loss leaders", meanwhile, are all about margins instore. The idea is that shoppers can be enticed to come in by aridiculously good deal, one that may even be below cost-price. rely on grabbing customers this way and thenhope those customers will also pick up a few extra items.

Dr Stewart says it is all about managing margins. "This has been around for a long time. While they have a loss leader theywill have other things they make good margins on, like fruit and vegetables.

l'I've noticed at New World at the [Wellington] railway station they have changed the beauty and toiletry display so youcan see across it. You can see it now and get taken in by it, all of that stuff is impulse. You'll see it, recognise it and chuck itin your trolley."

\.:11 i'"\ Q l"' i~ ":lIV"VQ 't-C' are constantly looking at an aisle or a segment of an aisle and thinking about how to increase turnover."They are good at deleting items that don't sell as well; if anything is not selling quickly enough for them they will delete ortake it out. They might put handwash or shampoo down but they have a look at the razor blades and [put] the price on thatup a bit. They balance out against each other."

Dr Stewart agrees increased competition will not benefit consumers. "I would argue it's a duopoly, there is not muchcompetition there really. I bet there is not much difference between the two."

Seduction Techniques

Consumers walk through fruit and vegetables first even though these will get squashed at the bottom of the trolley.Experts say this is to create an uplifting effect on the consumer and put them in a good mood for shopping.

Staples like bread and eggs and milk are never together and never near the entrance. This is so the consumer has to walkthrough as much of the store as possible, passing tempting products on the way.

"Loss leaders" are heavily discounted items often sold at a loss, the idea being that the shopper will pick up a few moreitems while in the store to balance out the margins.

Product information is kept at a minimum to keep shoppers from being overwhelmed.

Lighting and music are adjusted automatically to reflect what is going on outside and how busy the store is.

Chocolate and other treats are at the checkout so consumers can "treat" themselves for a good shop.

Positioning chips with dip or tea near biscuits makes sense and increases the sales of both.

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Kids make great shoppers so tempting items like sugary cereals are put at their eye- height.

Bestsellers and high-margin products are put at eye-level while products that don't sell as well or are better bargains areon the top or bottom shelves.

How To Shop Smarter

Consumer warns that prices advertised on the shelf sometimes haven't been updated at the checkout, so shoppers shouldkeep an eye on food as it is put through.

Make a list and stick to it - it's the key to avoiding impulse buying.

With specials, check the regular price to see the size of the actual saving.

Check prices and sizes. Smaller sizes sometimes work out cheaper than the larger size.

Don't go shopping when hungry. With a full stomach customers are less susceptible to the free samples and promotionsdesigned to tempt.

Get to know the local CIIr"orrY'l::lr!.r::llt layout. Customers who know where to get the things they need are less likely to be ledastray.

Source: Consumer NZ and Choice.com.au

'I I r"orrY'l::l1r V':::llt home brands growing in popularity

GLOBALLY, the recession has led to the rise of budget- priced generic store-brands as CIIi'"'OI"'Ir'Y\::III"' VOf-c promote their owncheaper products to prime spots on the shelf.

The British market for budget instore brands is estimated to make up around 40 per cent of all stock. Bycomparison, private brands in New Zealand are estimated by local researchers to make up 15 to 16 per centof stock. The figure is 17 to 18 per cent in Australia.

Retail analyst Tim Morris, of Coriolis Research, an Auckland market research firm, says store brands do well when theeconomy is down. "But when the economy is roaring away, consumers return to the brands they know and love."

Mr Morris says that often when store brands grow in popularity, it is the smaller manufacturers being squeezed out, whileloyalty to popular brands remains strong.

But manufacturers can sometimes have the option of producing the cllr"orrY'l::l,rv::llt'c own store brand products to remainprofitable.

Branding expert Jonny Mole says the promotion ofpush their own products.

In ...... I"'!"Y\"\I"' I." ....f- brands is inevitable as it costs the

"But still there's a lot of choice here and there's always going to be a demand for a range of products. With two mainplayers in the market, it does make more sense for them to source their own product."

19

In August, food manufacturer HJ Heinz criticised the dominant market power of Australian giants Coles and Woolworths forfostering an "inhospitable environment" for suppliers.

The Australian Food and Grocery Council claims CI Ii''''I O I'' rY'l ::::ll I''V ' :llt brands are imitating well- known and trusted branding toappeal to shoppers.

Coles and Woolworths are accused of mirroring designs, colours, names and labels of well- known brands.

Mr Morris says this is a common trend worldwide, though not seen much in New Zealand.

lilt's just a game that is played. Manufacturers are constantly concerned about it but it doesn't really impact the numberone brand."

Products like yoghurt and vitamins are constantly changing so copycat brands find it easier to focus on the basic productslike bags of sugar, which generally can't change much.

"There's always something going on, it is constant tech-warfare. Some categories are very resistant to private labels."

Mr Morris says consumers are generally very loyal to brands even if there is no real logical difference.

Customers have strong brand loyalty to some products and in areas like tobacco, razor blades and hair-dye store brandswill never do as well.

"Dairy is more susceptible to private labels because there's not much innovation. New Zealand is a long way away from therest of the world. We are just seeing the slow and gradual growth of private labels."

Fat And Booze: Twin Sins Of Advertising

\':ll r"\ Q I"'!"Y\ ,,:!,I"' Vl:ll + advertising has been criticised for breaching liquor advertising laws and promoting unhealthy options.Consumer NZ says fruit and vegetables make up too small a proportion of advertising. According to a 2005Health Ministry report, the total advertising spend by the food industry on chocolate, confectionery and soft drinks wasmore than nine times that spent on advertising for fruit and vegetables.

\.:11 i'"\ Q l"' i~ ":lIV" VQ 't-C' always have some fruit and vegetables on special, but they rarely have specials that encourage shoppers tobuy extra fruit and vegetables, according to the national watchdog. Consumer NZ has also called for more snack-freecheckouts, as is the case in some British chains. Progressive does not have any confectionery-free checkoutsand says there have been no demands for that. Foodstuffs says it is committed to having a minimum of 25 per cent of allits checkout aisles confectionery- free.

Consumer NZ says entice customers to stock up on beer and wine, and the Advertising Standards Authorityhas ruled against Progressive and Foodstuffs several times for breaching alcohol advertising laws.

Authority rulings over the past year include:

A Progressive flier advertising several bottles of wine on sale at Countdown was seen as misleading, as the image of thespecific wine used to advertise overall specials was not included in the actual sale. This complaint was settled. (April 2011)

A complaint against a New World newspaper advertisement promoting a training session with the Silver Ferns with alcoholprizes up for grabs was upheld. (August 2011)

A complaint against New World was upheld after advertising linked a car giveaway with alcohol. (December2010)/ Liquor advertisements are legally required not to use or refer to identifiable heroes or heroines of the young or tooffer motor vehicles or boats as prizes in any competition.

20

Exhibit 5: Greenlane Price Comparison (April 21st 2012)

Product Type/Brand Size Nosh Countdown Size2 EQPAvocados NZ Each 0.89 1.89Royal Gala Apples NZ 2kg 2.99 4.45 1.5kg 5.93Navel Oranges US kg 2.99 2.99Truss Tomatoes NZ kg 4.99 3.99Sweetcorn NZ each 0.99 0.49*Bananas kg 2.69 2.99Bananas All Good Fair Trade bunch 3.99 N/ALettuce Iceberg each 1.79 2.69*Potatoes Loose, white washed kg 1.99 1.98Sausages Beef Old English kg 12.99* 9.45 675g 14.00Bacon Freedom Farms Streaky 250g 12.99 8.99* (10.05)Lamb Rack /kg 52.49 28.99* (31.49)Steak Scotch Fillet /kg 34.99 36.99Corned Beef Silverside /kg 8.99* 6.49*Chicken Breast Free range skinless /kg 29.49 24.99Pork Freedom Farms Loin Chop /kg 26.49 18.99* (20.99)Snapper Fresh Fillets /kg 39.99 35.99* (37.99)Ciabatta 450g 5.29 4.75 380g 5.63Palm Sugar 454g 3.79 2.67 260g 4.66Fish Sauce Golden Boy / Asian Home Gourmet 200ml 2.79 2.66Mint Jelly Essential Waitrose / Masterfoods 340ml 5.99 4.05 290g 4.74Dijon Mustard Essential Waitrose / Delmaine 180g 4.99 2.99* (3.69) 200g 3.32Porcini Mushrooms Waitrose Cook's Ingredients 30g 14.99 N/APasta Colavita / San Remo 500g 3.29 2.30Couscous Essential Waitrose / San Remo 500g 4.99 2.81Olive Oil Olitalia / Lupi 1 litre 18.99 13.97

Olio Extra Virgin / Filippo Berio EV 1 litre 12.79 14.79Ground Cinnamon Waitrose CI (organic) / Greggs 33g 6.99 2.24 40g 1.84Bouquet Garni Bart / Masterfoods 109 5.49 3.59 4g 8.98

Waitrose Cook's Ingredients 14g 7.99 [12.56]Baking Powder Edmonds 400g 4.79 3.49* (3.74)Cornflakes Waitrose / Homebrand 500g 6.99 2.89Milk Nosh Essentials / Homebrand 2 Litre 2.49 3.54Butter Tararua 500g 6.99 3.99* (6.49)Beer Peroni Dozen 31.49 31.99Wine Nautilus Sauvignon Blanc Bottle 22.29 17.99* (25.99)

Pegasus Bay Pinot Noir Bottle 57.79 N/AChocolate Donovans Tablet 100g 4.99 N/AVerjuice Seleni Epicurean 375ml 20.99 N/ATruffle Oil Italian White 50ml 14.29 N/A

Comparable Shop Produce 24.96 30.11Meat & Fish 122.18 103.52Basics 45.12 42.58Alcohol 53.78 57.98Others 35.14 28.83

281.18 263.02Total 220.09 211.26

SIZE2 is the size at Countdown if different to NoshEQV is the price at Countdown for an equivalent size as Nosh offer* On Special (normal price)