Supermarket competition

Peter Bisley writes:

In the current competitive scenario, the average address in New Zealand has 2.05 options within 10 minutes’ drive. Full entrance of The Warehouse into groceries at all current locations would increase this to 2.77. Demerger of PAK’nSAVE from New World and Four Square, without The Warehouse, would increase the average options per address to 2.66, while both options simultaneously would give the average address 3.37 grocery options within 10 minutes’ drive.

Duopolies are better than monopolies but you need more than two options for true competition. The rule of Three and Four is that a stable competitive market has three competitors with the largest no more than four times the market share of the smallest.

The combination of The Warehouse going full supermarket and spinning off Pak’NSave looks like it would be very useful.