Supermarket operator Progressive Enterprises has rejected a new offer from the union representing locked out distribution centre staff.

The company says the proposal aimed at ending the two week dispute, would increase its employment costs by more than 13 percent. It had costed an earlier demand at around 30 percent.

Progressive managing director Marty Hamnett says 13.5 percent is still unrealistic, at a time when food inflation is running below four percent. However, he says the union's offer does open the way for further discussion.

"It's a positive sign. We've always said all along that we are very happy to talk about a realistic increase for our people based on the three existing contracts."