Online grocery business Supie is in voluntary administration with initial creditor claims estimated at about $3 million.
PwC's Richard Nacey and Stephen White say they were appointed voluntary administrators of Supie Limited, Workerly Limited and Bevie Limited on 30 October (Monday), by resolution of director Sarah Balle.
"The Supie Group operates a well-known online grocery business in Auckland. The business was established in 2021 as a start up, with the aim to introduce competition into the industry, as part of its mission to ensure all Kiwis have access to affordable, healthy food. The Group employs approximately 120 staff," Nacey and White say.
"The sole director of the three companies made the decision to appoint administrators following a key investor ceasing to continue providing funding to the business. This resulted in the business facing cash flow difficulties. While sales have rapidly grown over the last calendar year, recent growth has been lower than expected, and insufficient to provide the scale needed to operate profitably in what is a highly competitive industry."
"As voluntary administrators, we don’t have sufficient funding to continue to trade the business in administration. In the absence of securing funding, we expect to be seeking to have the three companies in the Group placed into liquidation in the near future," say Nacey and White.
"While the voluntary administrators are yet to establish the full extent of creditor claims across the Group, initial estimates suggest they will be in the vicinity of $3 million."
In June Balle told interest.co.nz of Supie's plans to take on the supermarket duopoly. She said Supie had signed up about 55,000 customers, had about 130 staff, and was planning physical stores.
Regulator's 'fix-it' list
Ironically the Commerce Commission issued a statement Monday saying new grocery watchdog, Pierre van Heerden, has revealed "the Top 3" on his current fix-it list for the country’s $25 billion supermarket sector:
- Pricing integrity – misleading or inaccurate pricing by retailers;
- Supplier behaviour – undesirable behaviour from some influential suppliers; and
- Level playing field – barriers to entry and expansion by alternative players.
"Just over 100 days into his role as Grocery Commissioner, Mr van Heerden reiterated the importance of the new Grocery Industry Competition Act, which took effect in July 2023, as a 'once in a generation opportunity to level the playing field in the grocery sector' to deliver sustainable benefits for New Zealand consumers over the long-term," the Commerce Commission says.
Van Heerden also wants to see "improving market conditions to help create more opportunities for new entrants in the sector."
34 Comments
Had a fantastic experience with Supie. Consistent order fulfillment on time. Reasonable prices for 90% of our purchases. And fresh produce that was significantly better quality than the competition. Really sad to see that they will be put into administration.
Who in the industry had deep enough pockets to actually grow it into something.
Warehouse Group seems to have a lot of cross over.
Faro have good brand and product crossover and could create a more avodable subbrand called Faro Supie for more affordable shopping. But would need a lot more cash.
Maybe one of the commerical players - Bidfood or Servicefoods?
The duopoly is certainly a tough nut to crack. They do not want a third party to take them on and they will be making it hard for any new players. A large overseas grocer needs to get involved. I would not mind if the government at the time it happens gives them financial support just like it helps film companies. Kiwis deserve and need a large third player with big financial muscle.
This article? It was from only 5 days ago...
https://www.stuff.co.nz/business/133167082/the-cheaper-supermarket-opti…
Sure. But this one is just a warehouse + logistics company. I'd be willing to bet a significant amount of the debt is deferred rent. If they aimed big right from the start, perhaps they over-provisioned warehousing?
Plenty of other companies in NZ running warehouse + logistics and making it work.
I wonder what the wastage was like (did they run fresh food?).
The reality is a supermarket is just a food warehouse where you don't have to pay the pickers - they bring themselves in voluntarily. Huge staff saving there, that an online-only presence would require significant investment in automation to overcome (inwards goods are more efficient than picking, so you're more than doubling the staff cost if you include picking as part of your service, never mind the additional cost of delivery that a traditional supermarket doesn't have to pay [though we appreciate both majors' delivery service in this household]). Supies 'advantages' just simply didn't exist.
I'd had a few robust discussions about this business model (incl with Sarah), based on experiences in Asia and a few of my own hypotheses (online grocery shopping is little more than a 'nice to have' as opposed to a fundamental shift in shopper behavior). Basically, NZ is already a high-cost grocery market for shoppers. Online grocery shopping doesn't solve that problem as we also don't have competitive and affordable delivery services. If your addressable market is say 10% of h'holds, then it makes sense if you can capture enough shoppers to make business viable and hope that national income will grow and people will migrate to your business model. Only hope for the business is medium to long term.
1. Signs that online grocery delivery can't work in S'pore, so why would it work in NZ?
Poor economies of scale raise questions about viability of grocery delivery startups (https://www.businesstimes.com.sg/opinion-features/poor-economies-scale-…)
2. The commerce commission's report used some very sketchy data from Kantar Worldpanel about online grocery shopping in Asia. Anyone familiar with Kantar knows that their data has to go through at least a sniff test. Knowing how the NZ govt operates, I doubt that this happened. Some of the data doesn't make sense.
3. Jerks like McKinsey can out with grandiose claims about shopper behavior and technology etc. Nobody confronts them. Because they're McK and smarter than everyone else.
You should checkout Ocado in the UK, absolutely amazing system and extremely popular in London and the south east. Mind you you’ve got millions of cash rich time poor persons in greater London, so their delivery system is very scalable and brilliant.
They are also licensing their online system out to other supermarket chains ex-UK.
As bricks n mortar seem likely to continue as dominant, it's time to break up the cartels. The Americans called it 'Trustbusting'
Maximum 50 outlets in each group (NW currently about 250). Let them decide how to split up. Lots of options then for consumers and suppliers both. Several different models would emerge. Completion breaks out.
It's a fiction that the cartels are efficient. They make money from control.
Let's just have hard law, nothing like the hopeless supervising 'commissioner' idea.
Limits of 50 makes no real changes as all that happens is you get regional groups which means for the people in the region who cannot travel outside there is no difference.
Take Auckland for instance, you are not going to drive from Silverdale in the North to Botany Downs in South Auckland for supermarket shopping or from Auckland to Rotorua or even using SI example Dunedin to Christchurch to get better supermarket shopping prices. So in real terms all you would be doing is reflecting the already internal regional groups the supermarket chains already have. Duplicating management demand in minor ways with no difference except price increases for everyone.
The duopoly can afford to use some profits to provide online/delivery options at a loss. Just to keep potential online only competitors from taking any meaningful market share. Only Countdown has made investments in automation using dark stores with micro fulfilment setups. But I have heard that those centers struggle to get the output that is promised. In other stores it is just employees walking the isles and shopping on behalf of customers.
We should all switch to online ordering and send them broke.
There are a few things here. The cartel mentioned above is a duopoly dominated by an NZ co-operative, and a foreign owned multinational. Only fools and idiots would throw Kiwi money overseas when they could spend it locally.
The cartel is already on record as telling Sanitarium not to supply Weet Bix to The Warehouse.
Any cartel busting would take us back to the 70s when I had a student job at Wardells in Johnsonville. All prices were much higher than now. Everything was made and grown in NZ. Our customers all seemed to get by with these high prices.
So frankly, the best we could do is ban foreigners from selling us groceries, and ban foreign made food from NZ. We would all get by without frozen sliced onions from France, and chocolate eclairs partly made in Belgium, partly in Germany.
The higher amount of money we would pay would all stay in NZ and would not get shovelled off shore. We would all be better off.
The answer is automation, Amazon style. Robots picking and packing delivery orders in a warehouse somewhere, delivered by drone to the household. Minimal human supervision. No need to worry about stupidly high minimum wages, exorbitant health and safety requirements, "diversity" requirements, or workers deciding that its simply too hard to do a 9-5 job.
Automation is the answer. But if Supie cant secure 3m of funding, which is diddly squat, how are they ever going to fund real investment in a lower cost position. Would love to do a real business study on supie and see where they went wrong. I'd put my money on that part of it was a lack of real-long term investors with deep pockets to actually make it work.
Agreed, and the tragedy is we have a growing fund Mgmt sector thanks to kiwisaver and a sovereign wealth fund. Was it really that hard for them to kick in $5mm and get it off the ground, rather than plug it into govt bonds and housing.
This is why there is no R&D and productivity is sliding backwards at a great rate of knots
Even Amazon still relies on humans in the chain as the robots are found to not be able to manage varying objects of differing shape, size, parts and delicacy very well. There are tech competitions for how a robot arm can gently pick up small thin items and delicate ones (for shopping think ripe soft tomato) but that is as far as we have got. We have robots that can fail to identify and collect various items so we still need humans in the mix, even just at QA level for each package. Amazon though has found a workaround it treats its human staff like robots. While there are great advances in robotics it is not a be all and end all and the tasks you want them to do must be well and clearly defined with a huge cost to putting in place all the logic for clearly defined rules and limited movements. It is why Amazon also has human delivery drivers for the much simpler task of transporting uniform size boxes to doors.
Yes but not in NZ. Capital required very high and market too small. Andover UK. https://www.youtube.com/watch?v=4DKrcpa8Z_E
Since https://www.costco.co.nz/ opened in Auckland, many households spend a good percentage of their monthly grocery shopping there.
30% as a guesstimate for many households go there in the area.
I support them purely because any money I spend somewhere else, (other than the duopoly) is money well spent creating competition.
The intolerable arrogance of the owner is really disgusting as employees were dropped without their last pay and none of their leave, yet the owner walks away with theirs, substantial benefits and while they feel really grateful for the employees and the work they do they did not care whether those same employees lose their housing because they cannot pay rent & pay for food while living paycheck to oops non existent paycheck. They literally cannot be "so grateful for all Supie’s supporters – employees, customers suppliers and shareholders" while literally making them unable to pay their rent with no support.
The devil may care attitude that leads the executive branch to walk away scot free with large bonuses while damning the people who do the actual work is rather immoral and unethical. Perhaps the table should be turned and it should be the executive branch who takes an ounce of responsibility for their actions, perhaps their housing should be up for grabs as well.
How about adding: "make sure that the grocery businesses are being efficiently run and that our price inflation isn't being driven by incompetence, entrenched history and poor productivity" to Pierre van Heerden's list?
Hanlon's Razor: Never attribute to malice that which is adequately explained by stupidity.
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