Spokeswoman Antoinette Laird said the group complies with privacy rules.
"Facial recognition is simply a more accurate version of CCTV."
"Where CCTV - which may include facial recognition technology - is used in our stores, signage alerts customers to the fact images may be taken, as per privacy requirements.
"Footage can only be used for the purpose it is intended, which is as a deterrent and tool against theft and as a means of keeping customers and staff safe."
Staff manually enter information on people of interest - those who are subject to a trespass notice and known shoplifters - who are then detected via CCTV if they return.
Bott said the use of facial recognition technology raised important privacy issues. He urged the Office of the Privacy Commissioner to initiate public discussion so privacy protocols could be established to control the use of people's facial data.
"There's no hint that anyone is looking at the privacy protocols of this and trying to ring-fence and contain the use of this material."
"Effectively what's happened is people going into a supermarket to buy goods are unwittingly having their images stored; we do not know for how long."
"That raises issues of consent because generally people who go to the supermarket to buy detergent or groceries are not giving consent for their image to be stored [and used]."
Bott said the risks included shop staff making mistakes and targeting the wrong people because the technology was not foolproof. Another risk was that identity theft would become easier if the system was used to link people's facial data with their Eftpos card.
Progressive Enterprises, which includes Countdown, Fresh Choice and Supervalue, said its stores did not use facial recognition technology.
A spokeswoman for New Zealand Westfield malls said she was not aware of any using facial recognition technology, although retailers within the malls might do so.
Laird said a number of South Island stores in the Foodstuffs group used a system called Auror, which does not employ facial recognition.
Through the Auror portal, retailers can enter information such as images of alleged offenders, vehicle registration numbers, details of the person's methods, the products taken and the date and time of the claimed offence. The information is forwarded automatically to the police crime reporting line.
Auror spokesman Kevin Ptak said businesses that used Auror included Countdown, Z Energy, Briscoes and Rebel Sport.
He described it as a smarter, digital way of making incident reports.
Dunedin mechanic Daniel Ryan was accused of shoplifting by Dunedin Centre City New World staff, but later received an apology after they realised he had been wrongly identified. Laird said it was human error.
The Office of the Privacy Commissioner didn't know any supermarkets were using facial recognition technology until told by a journalist and it urged them to do a privacy-impact assessment.
A spokesman for the commissioner said: "... facial recognition technology is not a new thing. It has been discussed for quite a number of years now but what remains unchanged is that any agency that wants to adopt it still needs to comply with the Privacy Act."
Panasonic offers a facial recognition system.
"Specific faces can be registered in advance to send an alarm when they are detected," the technology company says on its website. "The faces of repeat shoplifters and wanted criminals, etc. can be registered in the facial recognition security/surveillance system from data recorded in the past."
"Alarms can notify the operator by displaying pop-ups on the screen, emitting warning sounds, or flashing the camera on the map, etc.
"Face images can be used to perform searches. For example, face images of suspicious people detected on the sales floor can be searched to track information on a timeline, including what time they entered the store and which sales floor they passed.
"Whether suspicious people have shoplifted, etc, after entering the store can also be immediately searched for and checked by the facial recognition security/surveillance system."
