Why New Zealand Grocers Should Take Supplier Management Seriously

The New Zealand Grocery Supply Code of Conduct, in effect since September 2023, marks a turning point in retailer-supplier relationships. Introduced to address longstanding concerns about fairness in the grocery sector, the Code sets out clear expectations for designated retailers like Foodstuffs and Woolworths NZ. These include acting in good faith, using plain-language contracts, paying suppliers on time, and avoiding retrospective changes or unfair delisting’s. Non-compliance comes with steep penalties: up to NZ$3 million or 3% of annual turnover for companies, and NZ$200,000 for individuals.

But legal compliance is only the starting point. It’s the bare minimum.

The real opportunity lies beyond compliance. Retailers can turn regulation into a catalyst for better supplier relationships, competitive advantage, and long-term value. That’s where supplier relationship management (SRM) comes in.

Beyond the Letter of the Law

At State of Flux, we’ve spent the past two decades helping organisations take supplier management from a tick-box exercise to a strategic capability. Our SRM framework aligns naturally with the spirit of the Code, while going far further in practice.

Built on two decades of research and around six operational pillars: value, engagement, governance, people, technology, and collaboration, SRM creates a structured, measurable way to drive value from suppliers. This goes beyond fairness and transparency, delivering performance, resilience, and innovation.

Retailers often underestimate how much the supplier experience influences the customer experience. Suppliers often hold the keys to product quality, availability, innovation, sustainability. The better the supplier relationship, the more consistent and agile the customer offer.

Benchmark your supplier management with SRM research to discover how your current supplier relationships influence the end customer experience. You will receive a free benchmark showing how your operation compares to over 300 organisations worldwide, highlighting your strengths and areas for improvement.

The Business Case for SRM

Here’s what SRM can deliver, well beyond baseline compliance:

1. Compliance with confidence
   SRM embeds fairness, transparency and accountability into everyday practice. It ensures contracts, communications and performance expectations align with both regulatory standards and commercial goals.

2. Stronger supplier performance
   Trusted suppliers prioritise trusted customers. SRM builds the kind of relationships that unlock improved service levels, early access to innovation, and supply continuity when it matters most.

3. Risk reduction
   With structured SRM, problems surface early and can be resolved before they become costly disruptions. Clear escalation pathways and supplier segmentation provide much-needed visibility and control.

4. Operational efficiency
   Clarity in governance and collaboration reduces duplication, delays and disputes. SRM brings consistency across supplier tiers and categories, freeing up time and resource.

5. Competitive edge
   In a tight grocery market, small advantages matter. Retailers with strong supplier relationships are more likely to secure exclusive products, favourable terms, and co-investment in growth.

A Smarter Way Forward

The Code of Conduct is a necessary reset. For forward-thinking grocers, it is also a springboard. It is a chance to rewire how they manage supplier relationships for resilience, growth and strategic advantage.

In an environment of shrinking margins and rising expectations, SRM isn’t just smart. It’s essential.

Contact us today if you would like to strengthen your supplier management.