Cost increases from grocery suppliers to supermarkets have risen further in September as suppliers face sustained increases in input costs. The Infometrics-Foodstuffs New Zealand Grocery Supplier Cost Index (GSCI) shows a 9.2 percent pa rise in September 2022, which will maintain pressure on retail supermarket prices.
“The September 2022 index shows sustained larger cost increases with more costs going up to a greater degree. In September 2022, the cost of over 5,400 products went up - almost double the number of products which had a cost increase in September 2019, at 2,768,” said Infometrics Principal Economist and Director Brad Olsen.
This September, 80 percent of changes in the cost of goods sold by suppliers to supermarkets were to a higher cost, compared to 62 percent in September 2019. Cost increases of above 40 percent accounted for 3.0 percent of September 2022 changes, compared to 1.6 percent in September 2019.
September saw all departments again record annual cost increases from suppliers. Importantly, general merchandise supplier cost increases have now risen 9.4 per cent over the last year, moving into third place in terms of largest annual increases, behind produce (up almost 20 percent pa) and butchery (up over 10 percent),” said Olsen.
Previous trends of falling fuel and international food prices have not been maintained, with prices now stabilising at elevated levels. Diesel prices remained 58 percent higher than a year ago at the end of September and have stayed steady at just over $2.60/L in recent weeks – a level that will keep pressure on input costs.
“Recent falls in the exchange rate will put further pressure on the cost of imported goods, with the New Zealand dollar falling 6.5 percent against the US dollar in September and a total of 18 percent over the last six months. Current data still shows sustained supplier cost pressures, with input cost inflation still considerably elevated, which will maintain pressure on domestic supermarket pricing.”
