Supermarkets are encouraged to come to the party with genuinely reasonable prices this holiday season.
New Zealand’s Grocery Commissioner is challenging supermarkets to step up and offer meaningful savings for Kiwi households this Christmas and New Year holiday season to help address cost-of-living pressures.
Given significant increases in food prices over the last two years – which has had a substantial impact on household living costs – Pierre van Heerden said there was a real opportunity for the major players in the $25 billion supermarket sector to “bring some Christmas cheer” to Kiwi consumers by offering genuine and meaningful savings – particularly given those players would benefit from increased consumer spend at this time of year.
Van Heerden said he was encouraged by some of the pricing commitments he sees promoted in the sector for the Christmas and holidays. However, he wants to see those backed up with “genuinely good prices”, particularly when demand is highest.
“We know this has been a particularly challenging year for Kiwi consumers with cost-of-living pressures, so I’m asking supermarkets to implement Everyday Low Pricing (EDLP) throughout the holiday season rather than the practice of frequently moving prices up and down – to help ensure Kiwi consumers are getting a genuinely good price when they shop for their groceries,” said Van Heerden.
Van Heerden also urges supermarkets to ensure that they are accurate and not misleading when advertising specials or promotions.
“All retailers have obligations under the Fair Trading Act to ensure that consumers are not misled – all pricing and promotions, therefore, should be clear, accurate and unambiguous so that consumers can make a well-informed decision.”
Van Heerden continued that he wants supermarkets to become leaders in accurate pricing, given the positive difference this could deliver in terms of the cost of living for all New Zealanders.
“As one of the largest sectors in New Zealand, supermarkets should lead the way with accurate pricing and value for money. This sector touches every New Zealand consumer, so they must get this right.”
In October this year, the Grocery Commissioner announced that one of his priorities is clear and accurate pricing, with supermarkets being the most complained-about-sector to the Commission and pricing issues being a common reason. The Commission is exploring options to get to the bottom of the pricing issues but is also calling on supermarkets to get the right processes in place now.
Unit Pricing Regulations have also come into effect as of 31 August 2023, which require certain grocery retailers to display the unit price for goods clearly and legibly. It will help Kiwi consumers make informed decisions about the price of the products they buy when grocery shopping, primarily where products are sold in different-sized packaging and by different brands.
While physical stores must comply by 31 August 2024, Mr van Heerden is encouraging major grocery retailers to start taking steps to consider how this will be implemented, particularly in relation to promotions.
The Grocery Industry Competition Act was enacted on 10 July 2023, giving the Commerce Commission powers to monitor and regulate the grocery sector. The new function headed by the Grocery Commissioner oversees the Grocery Supply Code, which seeks to address the imbalance in power between retailers and suppliers.
The Grocery Industry Competition Act designates Foodstuffs North Island, South Island, and Woolworths New Zealand as regulated grocery retailers (RGRs). It requires them to consider requests from other retailers for wholesale supply in good faith and to follow the Grocery Supply Code in their dealings with suppliers.
These changes are designed to bring more competition to the sector and more transparency to agreements between the RGRs and suppliers, benefiting New Zealand consumers over the long term. This includes more convenient shopping, more choices and better prices.
