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Circle K’s Cook St store in central Auckland.
Global convenience retailer Circle K is expanding into New Zealand, and now sourcing goods from supermarket operator Woolworths.
Pamma Retail Group, the company behind local Circle K stores, has signed a wholesale agreement that will see the owner of supermarket chain Countdown supply it with groceries for its four Auckland stores.
Circle K is Woolworths’ eighth wholesale grocery supply customer, alongside the Mad Butcher, Reduced to Clear and Huckleberry, following the establishment of its wholesale supply division in June 2022.
Last year, after a Commerce Commission review into the grocery sector that found the industry to be “anti-competitive” and offering “unfair prices”, the Government moved to force the company’s two major grocery operators, Foodstuffs and Woolworths, to offer wholesale supply to encourage better prices.
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Steve Sexton, general manager of Woolworths’ supply arm New Zealand Grocery Wholesalers, said the separate wholesale business had shipped more than 8000 cases of product to its retail customers so far worth hundreds of thousands of dollars.
The business was also in negotiations to supply other retailers including The Warehouse.
Sexton said Woolworths wanted to do more wholesale supply deals but relied on its suppliers coming to the table. “By and large we have a very supportive supplier base that have enabled us to be supplying 4800 lines but there are some key suppliers and key lines that we are still in talks with, encouraging suppliers to be part of the programme.”
He said not every supplier wanted to supply its product to other retailers.
“There are certainly some large suppliers that are a little standoff-ish at the moment, but we are talking to those suppliers and encouraging them and negotiating with them.”
Sexton said Woolworths’ wholesale supply was a viable business despite it being the product of government intervention. “We make an appropriate margin for wholesale.
“Globally wholesale margins are pretty modest, and we would be mimicking that.”
Circle K has more than 14,000 shops worldwide, including in North America, Europe and Latin America. It first expanded into New Zealand in 2018 and has two stores located in central Auckland and another two in Newmarket and Morningside.
The business is known globally for its convenience offering including self-service coffee kiosks.
Iqubal Basra, chief executive of Pamma Retail Group, the New Zealand master franchisee for Circle K, said Circle K stores aimed to provide consumers with a “one-stop-shop” for daily needs at “competitive” prices.
“We are excited to introduce our new grocery offerings and provide customers with a convenient and affordable shopping experience. We will continue to expand on our grocery selection to meet the evolving needs of our customers,” said Basra.
Circle K is in growth mode and preparing to open its fifth Auckland store. The business was bought by Couche-Tard, headquartered in Laval, Canada in 2003.