Although costs are rising, this is happening at a less intense pace, the slowest since the end of 2021. Per the Infometrics-Foodstuffs New Zealand Grocery Supplier Cost Index (GSCI), there has been an average increase of 3.7 percent in what suppliers charged Foodstuffs last month compared to a year ago.
Previous analysis shows that supplier costs are a significant component of supermarket prices, representing two-thirds of the on-shelf price.
The Infometrics-Foodstuffs New Zealand GSCI measures the change in the list cost of grocery goods charged by suppliers to the Foodstuffs North Island and Foodstuffs South Island co-operatives, making it the largest dataset of its type in New Zealand, to give a real-time view on supplier cost changes.
“February 2024 still had a considerable boost in supplier cost increases from January, with the largest monthly gain since July 2023,” said Infometrics Chief Executive and Principal Economist Brad Olsen.
“However, this monthly gain is still lower than in February 2023, when it was so significant that the annual rate reaccelerated to 10.4 percent year-on-year.”
There is a sustained trend of more individual cost increases continuing to occur. Cost increases in February 2024 skewed slightly higher than at the same time in 2021.
In February 2024, almost all departments recorded a monthly rise in supplier costs. Frozen foods increased further, driven by frozen vegetables and fries.
Grocery items also saw a more considerable increase in supplier costs, driven by higher coffee, energy and powdered beverages, and chocolate supplier costs.
Produce cost increases have the smallest annual increase of all departments.
“External data confirms less intense input cost pressures for suppliers than in recent years, which is encouraging. But the February result also reconfirms that the ‘new normal’ for supplier cost rises may be higher than before.”
