Issue addressed Since 2005, a government-endorsed strategy guiding food sold in New South Wales school canteens has been in place. This study describes the changes in school canteen food between 2007 and 2010 and characterises schools most likely to adhere to strategy guidelines. Methods Menus obtained from a cohort of primary and central schools in the Hunter New England region of New South Wales were audited using a traffic light system of classification. Energy dense, nutrient-poor or 'red' items are restricted; 'amber' are to be selected carefully and healthier 'green' items are encouraged. Results In 2007, 7% of schools had no red items on their menu. In 2010, this improved to 22% (P<0.05). In 2010, small schools (OR≤1.9, 95% CI≤1.25-3.05, P≤0.003); lower socioeconomic schools (OR≤1.3, 95% CI≤1.02-1.78, P≤0.03); non-government (OR≤1.7, 95% CI≤1.22-2.23, P≤0.001) and rural schools (OR≤1.7, 95% CI≤1.30-2.25, P<0.001) had higher odds of having red items on the menu. No significant change occurred in the proportion of green foods listed for sale between 2007 and 2010. Conclusions Proportion of schools adhering to strategy guidelines had increased slightly, however, most continue to list red items for regular sale. So what? For health policies to improve public health they need implementation. Findings suggest more work is required, particularly in small schools, rural schools and non-government schools.