Woolies eyes the Red Shed as next NZ target

MELBOURNE - Just days after acquiring 150 Foodland Associated stores in New Zealand, Woolworths chief executive Roger Corbett has hinted that another Kiwi retailer, The Warehouse, could be next on his takeover list.

Woolworths teamed up with wholesaler Metcash to acquire the New Zealand and Australian operations of Foodland.

Corbett said yesterday that the Foodland stores, for which Woolies paid $A2.5 billion ($2.7 billion) including 22 stores in Australia, would act as a beach-head in New Zealand to enter the general merchandise market.

"The Warehouse is a successful business in New Zealand and one that has done well for a long time," Corbett said.

"We have made some assessment of [The Warehouse] already.

"We will continue to assess that and we'll take advantage of whatever is the best way to achieve the objectives of moving into general merchandise."

He said Woolworths was also looking at the financial services and insurance sector as superannuation choice was ushered in.

"We have a large superannuation fund inside Woolworths and we're looking at the question of choice and how that can be accommodated," Corbett said.

"In regards to financial services, we will develop that moving forward as opportunity determines but we are certainly interested in that space."

The competition regulator is still looking at the acquisition of Foodland and wants to ensure that consumers have a competitive choice of shopping close to where they live.

Australian Competition and Consumer Commission chairman Graeme Samuel said the regulator was looking at where the acquired supermarkets were located and what potential there was for other supermarkets to compete against them.

"The primary object will be to ensure that there is no particular area where the Woolworths acquisition will lead to a lessening in competition where the consumers, in the medium term, would have no choice," Samuel said.

In the Foodland carve-up, Woolworths will acquire 22 Action supermarkets in Western Australia, New South Wales and Queensland, along with the other stores in New Zealand.

- AAP