The Warehouse Group is following the introduction of Countdown's transgender policy with one of its own to support staff undergoing a gender transition.
Staff at The Warehouse, Warehouse Stationery, Noel Leeming and Torpedo 7 will be given 10 days' paid leave as well as support.
The supermarket chain has already promised to use preferred names and pronouns for transgender employees, also giving staff the right to use sick leave for medical treatment during their transition.
Those transgender employees could also use whichever bathroom and changing room that best suited their gender identity.
InsideOut national coordinator Tabby Besley says any business introducing supportive transgender policies is welcomed.
"I'd love to see more businesses following suit and introduce policies that support transgender staff," she told Fairfax Media.
"I'd like to see The Warehouse go to the next level with their stores. Their clothing is still gendered so why not extend support to their customers?"
Ms Besley said it was a major challenge for transgender people to have a support network at work.
"People have to be vulnerable to share what's going on with them, so if a workplace does have a policy that supports them, that acknowledges their change, it normalises it for everyone."
The Warehouse Group chief people officer Anna Campbell said the making all employees feel accepted was a priority, with further inclusiveness initiatives in the works for the company.
"We've been working closely with Rainbow Tick to ensure the policy matches best practice, and we're working through the process of gaining the Rainbow Tick accreditation," she told Fairfax.
Rainbow Tick director Michael Stevens said The Warehouse was "setting an excellent example to the rest of New Zealand businesses".
"Policies like this are really important. More and more transgender people are being open about who they are and it is vital that businesses can support them," he told Fairfax.