The pace of supplier cost increases to Foodstuffs supermarkets remained steady in May.
The Infometrics-Foodstuffs New Zealand Grocery Supplier Cost Index (GSCI) shows an average two percent increase in what suppliers charged in May 2025, compared to a year earlier.
“This result is the third month in a row recording a two percent pa annual increase, highlighting that broad grocery supplier cost increases are more stable,” said Infometrics Chief Executive and Principal Economist Brad Olsen.
“However, a number of key items continue to increase in cost at a more rapid rate as global events influence cost trends.”
The Infometrics-Foodstuffs New Zealand Grocery Supplier Cost Index (GSCI), commissioned by Foodstuffs New Zealand, measures the change in the list cost of grocery goods charged by suppliers to the Foodstuffs North Island and Foodstuffs South Island co-operatives.
The Index utilises detailed Foodstuffs NZ data across over 60,000 products that the Foodstuffs co-ops buy to stock in their 500+ stores, making it the largest dataset of its type in New Zealand, to provide a real-time view of supplier cost changes.
Every month, the Index tracks the costs supermarkets incur to purchase goods for their shelves. Previous analysis showed that supplier costs are the major component of supermarket prices, representing two-thirds of the on-shelf price.
Supplier costs rose across all departments in May. Olsen said a number of fruit and vegetables costs rose over the month, alongside higher beef costs as international protein prices remain elevated.
Butter, cheese, and yoghurt costs rose further, with lower dairy supply globally amid strong demand, which has pushed up international and domestic costs. Chocolate and coffee costs rose further in May, but olive oil costs have levelled off. Supplier costs also rose across a number of nut varieties and for potato chips.
Month on month, nearly 2,900 products increased in cost in May 2025 compared to April, which is broadly in line with the 12-month moving average of 2,700 a month.
However, there were a higher number of larger magnitude cost changes in May, both cost increases and decreases. Around 17 percent of cost movements were increases of more than 20 percent, and nearly one in ten were declines of more than 20 percent.
“Cost escalation concerns remain, with higher import costs occurring in the March quarter, and at a faster pace than previously seen."
New Zealand commodity prices have increased too, with higher dairy, meat, and horticulture prices globally adding pressure on supplier costs for these items domestically. Improving the supply of some international inputs has contributed to some supplier cost increases levelling out, but costs still remain at elevated levels.
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