While the Grocery Action Group commended the valuable insights from The Grocery Commissioner’s second annual report, it has shown once again that Kiwi consumers are paying way over the odds for their groceries.
Sue Chetwin, GAG’s chair, said the report was a valuable yardstick on grocery practices and prices in general and contains lots of great talking points, but it’s devoid of any good news for consumers.
“Clearly, our NZD 27 billion grocery market needs big, bold and progressive moves by the government if we are to see healthy competition and lower grocery prices restored. On top of the 4.6 per cent increase in grocery prices for the year to May this year, there are other findings in the report that are thoroughly alarming,” said Chetwin.
“For instance, it notes we are paying higher than the OECD average for groceries even though we earn well below the average OECD wage.”
She said another disturbing fact was that the prices that the supermarket chains pay their suppliers are subsidised by around NZD five billion in rebates, discounts and promotional payments paid by the suppliers.
“The lack of competition is the key reason why New Zealanders are paying too much for their groceries, and in places where there is no competition, the markups are even higher, though their overheads, such as rent, are often lower.”
In rural areas and smaller towns where New Zealand’s supermarket choices are narrow or non-existent, the report confirmed what those living there already know – that consumers pay a premium for the lack of competition.
In places like Te Anau, where there is only one large supermarket alongside a Four Square, consumers are paying 33 percent more for grapes, 15 percent more for Woolworths brand flour, and Nescafé coffee, which is on special in both Te Anau and nationwide, is 14.8 percent more.
“This kind of geographic price gap is unacceptable. Fair prices shouldn’t depend on your postcode. We are eagerly waiting to hear from the Minister for Economic Growth, Nicola Willis, on how she proposes to restore our broken grocery market.”
More local FMCG news here
