Foodstuffs have kept its supermarket prices below inflation levels for the fifth month in a row. Food inflation sat at 8.3 percent in September and the average Foodstuffs supplier cost increase on the same basket sat at 10.3 percent. The retail price increase to Foodstuffs customers was only 6.8 percent, 1.5 percent less than inflation and 3.5 percent below supplier cost increases.
“Global food growers, makers and retailers are facing the most complex set of headwinds in decades, which is continuing to impact supply and push up prices,” said Chris Quin, Foodstuffs NZ Managing Director.
Foodstuffs stores keep grocery price increases below FPI for fifth consecutive month.Quin recently returned from the US and Canada where he met with other major grocery retailers and discussed the global challenges.
“We’re all facing the same set of challenges driven by the three W’s - war, wages and weather. We’re also seeing the same changes in consumer behaviour, where value is now king. What those international retailers wanted to hear from us is how we are carefully managing our input costs so that we can hold our ground in the fight against inflation for our customers,” said Quin.
“The latest analysis shows that our work to fight inflation for our customers is paying off. It also shows the extent to which we’re absorbing record cost increases so that we’re not passing them all directly onto customers in the retail price on the shelf.”
According to the Foodstuffs Price Index, 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.
“Globally, producers are saying that they aren’t seeing an end to inflation and that they’re paying higher prices for labour, commodities and packaging. It’s the same story here in New Zealand.”
“Acute labour shortages continue to be one of the biggest problems facing businesses. The labour squeeze is not only hurting our industry but also our producers. Fruit and veges are going to cost more if we don’t have enough people to pick, pack or stack them on shelf. Now we’ve also got the added challenge of a weaker New Zealand dollar, which will push up the cost of importing groceries further.”
“In our last quarterly customer insights survey, around a third of our customers said they are planning to budget more carefully and shop around more to find the best deals this Christmas. Our number one priority is helping customers find value for their budget in every supermarket aisle.”
