The pace of supplier cost increases to Foodstuffs supermarkets slowed slightly in January.
The Infometrics-Foodstuffs New Zealand Grocery Supplier Cost Index (GSCI) showed an average 2.1 percent increase in what suppliers charged in January 2025 compared to a year earlier.
This slight slowdown in the annual change rate came after two months of reacceleration, but despite the recent volatility, the annual increase in the Index continues to be close to two percent p.a.
“January, like December, is impacted by the usual summer cost change moratorium on most items, making trends harder to pick,” said Infometrics Chief Executive and Principal Economist Brad Olsen.
“Many companies and industries use moratoriums to minimise system changes and protect trading for customers over the holiday period. January usually sees more limited cost changes, with many items remaining the same in cost, and only more seasonal and perishable items changing.”
The Infometrics-Foodstuffs New Zealand GSCI measured 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 utilised detailed data across over 60,000 products the Foodstuffs co-ops buy to stock in their stores, making it the largest dataset of its type in New Zealand to give a real-time view of supplier cost changes.
Every month, the Index tracked what it cost supermarkets to buy the goods to put on the shelf. Previous analysis showed that supplier costs were a significant component of supermarket prices, representing two-thirds of the on-shelf price.
Over the last 12 months, the number of items increasing in cost has averaged around 2,700 monthly, nearly 50 percent higher than 2019's monthly average.
Costs in January 2025 remained higher for all departments compared to last January. The bakery had the most significant annual increase of any department, up 3.7 percent pa, followed by chilled foods at 3.4 percent due to higher dairy input costs.
“Cheese, butter, milk, and cream costs all remain above year-ago levels as a result of strong pricing on global markets.”
Several fruits remained below year-ago costs, but capsicum costs rose materially in January due to strong offshore demand, contributing to overall produce costs rising 1.2 percent pa.
“Wider input cost trends show some increase in cost pressures, with higher diesel costs compounded by a continued lower exchange rate heightening risks around imported cost pressures and wider transport costs. New Zealand businesses are also reporting more cost pressure expectations than before, adding to this risk.”
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