In Australia and New Zealand’s supermarket sector, Woolworths has long reigned as a key player. With an extensive footprint and aggressive growth strategy, the retail giant has been steadily expanding its reach. But as Woolworths pushes forward, a growing chorus of critics and regulators is raising the alarm over one of its most potent tools: land banking.
At the heart of the debate is Woolworths’ extensive land acquisition strategy, facilitated in part by its property arm, General Distributors Limited (GDL). This subsidiary plays a critical role in securing prime sites for future development, often in rapidly growing urban areas. One recent example is the brownfield site in St Albans, Christchurch—known locally as the Orion site—where Woolworths has lodged a resource consent application for a supermarket-led mixed-use centre. The proposed development includes a full-service supermarket, small-format retail spaces, a village green, and supporting infrastructure on the 1.443-hectare site. It aims to rejuvenate a long-derelict block and serve the needs of a rapidly intensifying residential neighbourhood.
In New Zealand, specifically, Woolworths has also drawn scrutiny from the Overseas Investment Office (OIO). A report released this month revealed that the OIO significantly scaled back Woolworths’ request for a standing consent to acquire land. While Woolworths sought the ability to purchase up to 100 hectares across 20 sites, the OIO approved only 75 hectares and cut the term of consent from five years to three. The regulator cited underutilisation of previous consents, noting that only six of ten pre-approved purchases had been completed over the prior five years. Among these was the Christchurch Orion site and another near Hamilton in the fast-growing Peacocke suburb.
Despite Woolworths’ claims that it currently has no plans to build residential accommodation, the OIO has permitted acquisitions for staff housing in regions where affordable housing shortages impact supermarket operations, such as Queenstown and Wanaka. Still, the report highlights Woolworths’ intent to keep its options open—an approach some interpret as a classic case of land banking.
Land banking, a practice where companies purchase land without a clear or timely plan to develop it, has become a flashpoint in the ongoing debate over supermarket competition. Critics argue that this strategy allows dominant players like Woolworths and Coles to sideline competitors by locking up desirable real estate. In some cases, entire shopping centres have been acquired, including those where rivals operate.
In Australia, the controversy has prompted a strong response from the government. In October 2024, Prime Minister Anthony Albanese announced a sweeping review of planning and zoning laws, stating that existing frameworks “are acting as a barrier to competition by inhibiting business entry expansion.”
The Australian Competition and Consumer Commission (ACCC), already conducting a year-long supermarkets inquiry, echoed these concerns in its interim report. The Commission flagged zoning laws, land use restrictions, and planning regulations as structural obstacles to competition. While it has yet to determine if land banking is occurring systematically, it noted Woolworths holds interests in 110 sites for future supermarkets, with Coles not far behind at 42. Aldi, by comparison, has just 13.
To bolster enforcement, the federal government has allocated $30 million to the ACCC, enabling deeper investigations into retail sector practices. The watchdog is also pursuing legal action against both Woolworths and Coles over alleged misleading discounting strategies. These efforts form part of a broader crackdown, which includes reforms to the Food and Grocery Code, higher penalties for breaches of consumer law, and a review of merger provisions.
Woolworths, for its part, maintains that its acquisitions are legitimate and strategic. Its property arm insists that standing consents simplify compliance and allow for more efficient expansion. But in Christchurch and elsewhere, the tension between corporate growth and community interest is palpable. While new supermarkets may bring welcome convenience and investment, the public and policymakers alike are questioning whether the long game of real estate control serves fair competition, or simply tightens the grip of supermarket giants on an essential sector.