Groceries in New Zealand are the sixth most expensive in the OECD, and there's weak competition between the two main supermarket companies

Those are some of the findings from a draft Commerce Commission report into the retail grocery sector.

Chair Anna Rawlings says there needs to be another main retailer but that's not likely to happen unless there's intervention.

She says one option would be to require the two main players to sell off some stores to create a third major retailer.

Rawlings says wholesale and retail grocery companies could also be separated, and new sites for supermarkets could be freed up.