The pace of supplier cost increases to Foodstuffs supermarkets picked up slightly in November.
The Infometrics-Foodstuffs New Zealand Grocery Supplier Cost Index (GSCI) showed an average 2.1 percent increase in what suppliers charged in November 2024 compared to a year earlier.
“This annual increase is a slight change in trend, after the 2.0 percent pa rise recorded in October,” said Infometrics Chief Executive and Principal Economist Brad Olsen.
“This slight shift shouldn’t be overblown, with current trend growth in the GSCI still at more moderate levels than a year ago. But with further cost increases for specific items, there is still some cost pressure in the system.”
The Infometrics-Foodstuffs New Zealand GSCI commissioned by Foodstuffs New Zealand 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 used detailed Foodstuffs NZ data on over 60,000 products in its stores. Every month, it tracked the supermarket's cost of buying the goods to put on the shelves.
Previous analysis showed that supplier costs were the major component of supermarket prices, representing two-thirds of the on-shelf price.
“Month on month, nearly 3,500 items increased in cost in November 2024 compared to the previous month—the highest monthly total since July 2024. Although the monthly count continues to be volatile, the average over the past year has been around 2,700 monthly items.”
Olsen added that year over year, in November 2024, costs remained higher for all departments than in November 2023.
There has been some slight reacceleration in cost increases in some departments. Bakery and chilled foods costs were both up 3.1 percent pa, driven by recent rises for dairy products like butter and milk. Chocolate and cooking oil costs have continued to rise, keeping general grocery cost increases at 2.3 percent pa.
“Cost increases seen recently for several products are linked to lower global production, which will take time to change. There are also signs of broader cost pressure recently, with the lower currency making imports more expensive and fuel costs rising slightly. Other input costs appear to have stabilised, with on-farm costs holding around present levels for the last year, and global food prices also broadly stable.”
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