The Foodstuffs grocery co-ops, PAK’nSAVE, New World and Four Square stores have marked two years of efforts to tame food price inflation.
In mid-2022, the co-ops started comparing the average rate of price increases across their stores for foods in the same categories Stats NZ uses in its food inflation ‘basket’. Two years later, their average rate of increase has almost always been lower than Stats.
Chris Quin, Foodstuffs NZ’s Managing Director, said that the co-ops’ focus on fighting food inflation had been unwavering over the past two years.
“New Zealand’s rate of food price rises is now significantly lower than most other developed countries,” said Quin.
“Australia and the UK are both still seeing food inflation of around four percent per annum, Europe three percent, and the US around two percent. So, the rate here is now half a quarter of what’s still being seen overseas.”
He added that this has dramatically relieved the country and the economy. In April, the co-ops recorded a three percent year-on-year rise in what suppliers charge for the same goods in Stats’ basket.
“In the two years we’ve been watching this, our price increases for that basket, which has a lot of family staples, have almost always been lower than the rate of supplier cost increases for the same goods.”
As a trading nation, New Zealand has relied heavily on global markets and international suppliers for prices, so the co-ops must be as efficient as possible to compete on the world stage.
“Two years ago, when food price inflation took off, our 500-plus local store-owning families committed to fighting it for customers and being accountable by reporting on progress every month. We reinvest into New Zealand by being resilient and proactive when faced with big challenges.”
Bumper growing conditions for many crops after the cyclones of 2023 continue to be an essential reason food price growth has slowed in 2024, with the ten most significant price drops in April shown below:
Foodstuffs’ produce experts expect ongoing strong supply due to consistently stable weather over recent months, albeit with the potential for adverse impacts as colder temperatures set in.
At the same time, the co-ops’ logistics experts mentioned that diesel prices are higher than last year's, and freight moving through the Red Sea and Panama Canal is being held up by some ongoing issues.
Imports account for a significant proportion of what New Zealanders buy each week, and the Foodstuffs co-ops invest a lot of time and energy in ensuring those products make it to store shelves.
“It’s important to remember in the debate over grocery competitiveness that a lot of what we buy for our customers comes from a few large multinational suppliers who set their price terms, typically ‘the smaller you are, the more you pay’. That includes many must-haves our shoppers expect.”
Stats NZ measures food price inflation by tracking the prices of individual items that make up a representative food basket.
Foodstuffs NZ measures the prices of products in the same categories as that basket, applying the exact weighting and methodology to calculate a year-on-year rate for retail prices and supplier costs, comparing the latest month with the same month one year earlier.
