Food fight pays off for shoppers

The Warehouse's entry into supermarket wars is driving prices down - but its closest competitors are going one better, according to an official survey.

Consumer magazine has updated its annual survey of supermarket prices following the opening in June of The Warehouse's first full-scale grocery store, at Auckland's new Sylvia Park complex.

The magazine compared the price of buying a basket of 37 leading items at The Warehouse Extra in Sylvia Park with the cost of the same items at nearby Pak'N Save and Countdown outlets. It found Pak'N Save Botany Downs was the cheapest, at $110, followed by Countdown Mt Wellington at $112. The shop cost $118 at The Warehouse.

However, Consumer says The Warehouse Extra has forced prices down in east Auckland. Its wider survey in May shows the basket of goods cost $117 at Pak'N Save Albany, and $131 at Countdown Birkenhead, both on the North Shore.

Rob Chemaly, acting general manager retail operations for Pak'N Save operator Foodstuffs, said the result was not surprising as for 10 years Pak'N Save had been cheapest in the annual Consumer nationwide survey. He conceded The Warehouse had intensified competition.

"We have to be as aggressive as possible. If that means we have to go under cost to maintain a price position, then clearly we will."

The Warehouse chief executive Ian Morrice said prices were changing almost daily, and a different selection of goods might produce another result. "There won't be an $8 difference on an ongoing basis."

Consumer does not reveal its exact shopping list because in the past there had been an incident of a supermarket manipulating prices to come out looking good.

Nationwide, Pak'N Save was the cheapest supermarket in every main centre, followed by Countdown. The most expensive place to buy the basket of goods was Woolworths Kilbirnie, in Wellington.