Supermarket giants' rivalry hits top shelf

Foodstuffs will open its second Duffy & Finn's, in Pukekohe, next month.

The emerging grocery war between Foodstuffs, Woolworths Australia and the Warehouse is spilling over into the liquor sector.

Foodstuffs is pushing ahead with stand-alone chain Duffy & Finn's as it prepares for Woolworths to introduce its Dan Murphy chain to New Zealand.

"We expect the first Dan Murphy early next year," said Rob Chemaley, strategy and new ventures general manager at Foodstuffs Auckland.

The first Dan Murphy was tipped to open near a new Countdown complex in Manukau City, he said.

Woolworths could not be reached to confirm the move, but retail analysts said it had been signalled in the past.

Foodstuffs opened its first Duffy & Finn's store in Wellington two months ago and Chemaley said the second Duffy & Finn's was due to open in Pukekohe next month. Foodstuffs was looking to increase its rollout, he said.

Dan Murphy has 53 stores in Australia and, unlike owner-operated Duffy & Finn's, is expected to be wholly owned by Woolworths Australia, which owns Progressive supermarkets in New Zealand.

Grocery companies are moving into stand-alone branded chains because supermarkets cannot stock spirits or ready-mixed spirits drinks.

Guy Hallwright of Forsyth Barr said the move was partly to ensure that the grocery companies maintained and improved their share of the markets.

Meanwhile, The Warehouse, which is challenging Woolworths and Foodstuffs by moving into groceries, is watching the supermarkets liquor competition closely.

"We are aware that supermarket operators are opening their own liquor stores, said corporate spokeswoman Cynthia Church.

The Warehouse has made its own forays into alcohol, opening pilot "store within a store" operation The Warehouse Cellars, selling beer and wine but not spirits. The trial stores are at The Warehouse in Fraser Cove, Tauranga, and at Silvia Park.

Retailers Association chief executive John Albertson said that the scale of supermarkets' purchase of wines meant it could easily pass on savings to the stand-alone stores.