For the third consecutive month, the co-op grocery stores operated by Foodstuffs have maintained an average food price inflation rate of less than one percent per year.
The two co-op entities of Foodstuffs, which are owned by member families and operate over 500 PAK'nSAVE, New World, and Four Square stores across the country, have been comparing the average rate of price increases across their stores for food items in the same categories as Stats NZ's food inflation 'basket' since mid-2022.
In May 2024, while Stats NZ reported an annual rate of 0.2 percent, the Foodstuffs co-ops recorded a rate of 0.45 percent. This marks the third consecutive month in which both rates have been below the government's one to three percent inflation target.
Chris Quin, the managing director of Foodstuffs NZ, expressed optimism at seeing food price inflation remain below the lower end of the range following two years of concerted efforts by the co-ops to control it.
"The last time New Zealand experienced three months of sub-one percent annual food price inflation was in late 2018. Essentially, it means $100 worth of goods sold a year ago costs less than 50 cents more now,” said Quin.
"In an ideal world, there would be no inflation, but as grocers, we understand that upward cost pressures always exist. It's our responsibility to continue mitigating those pressures by making wise purchases and securing good deals to keep prices low."
In May, the co-ops observed a 3.6 percent increase in suppliers' charges for food categories in Stats NZ's basket, marking the eighth consecutive month in which supplier cost rises exceeded retail price increases.
Quin said that the co-ops have been absorbing the difference between retail price increases and supplier cost rises because they were committed to combating inflation on behalf of their customers.
"The success of our united approach underscores the value of our proposal to merge our two co-ops into one national co-op, enabling us to continue advocating for low prices well into the future."
Additionally, the average price of fruit and vegetables in Stats NZ's basket decreased by 9.5 percent. At the same time, Foodstuffs' produce experts mentioned that new season avocadoes were now available in-store, providing relief to growers after many suffered cyclone damage last year. Prices are expected to decrease as supply improves.
However, due to winter light levels and colder temperatures, covered crops like tomatoes and capsicums have become out of season, leading to higher prices that reflect the suppliers' additional heating costs for their glasshouses.
At the same time, the co-ops' logistics experts highlighted that while shipping costs remained relatively stable, there have been warnings of potential increases. They indicated that greater demand for shipping space out of Asia and reduced global supply of containers due to the Red Sea crisis have made securing regular and reliable bookings to ship goods to New Zealand increasingly challenging.
Quin added that one of the Foodstuffs co-ops' strengths was their ability to respond to such logistical challenges. They use their in-house experts and bulk-buying power to ensure supplies keep coming through.
“Our co-ops were formed so individual grocers could band together and get better deals for their customers. There’s strength in numbers, and even more so in today’s globalised world. As a nation of five million in a world of eight billion, you need a united voice to be heard.”
He attributed the overwhelming approval of the co-ops’ proposed merger last week to grocers, knowing that being one nationwide grocery co-op will ultimately make them more robust in the global marketplace and better able to keep delivering value at the checkout.
