Cost increases from grocery suppliers to supermarkets continue to accelerate, keeping pressure on retail food prices, with the Infometrics-Foodstuffs New Zealand Grocery Supplier Cost Index (GSCI) showing an 8.7 percent pa rise in August 2022.
The Infometrics-Foodstuffs New Zealand Grocery Supplier Cost Index (GSCI) measures the change in the cost of grocery goods charged by suppliers to the Foodstuffs North and South Island cooperatives.
“This Index tracks what it costs supermarkets to buy the goods to put on the shelf,” explained Infometrics Principal Economist and Director Brad Olsen.
Previous analysis shows that supplier costs are the major component of supermarket prices, representing two-thirds of the on-shelf price.
“Cost increases from suppliers remain broad-based across product categories. Almost three times the number of products increased in cost than for the same month in 2019, with larger increases being seen across a wider group of these products. In August 2022, 9.4 percent of products rose in cost by more than 20 percent, compared to 6.0 percent of products in 2019.
“Sustained higher input costs are driving suppliers to pass on these higher costs. The continued rise in both the number and scale of cost increases from suppliers to supermarkets underscores the continued mounting pressure on retail grocery prices.”
Recent data from Stats NZ shows the level of input cost pressures in the economy, which are feeding through to the costs charged by suppliers to supermarkets, and into on-shelf prices.
“The Farm Expenses Price Index has increased at its fastest pace since it started in 1993 and import prices for food and beverages have risen at the fastest rate since 1985. Rising cost pressures both domestically and internationally are putting pressure on suppliers across the board,” said Olsen.
“The momentum in supplier cost pressures within New Zealand suggests that supermarket costs and broader inflation measures will remain elevated for now.”
