The pace of supplier cost increases for Foodstuffs supermarkets slowed last month. The October increase was the slowest pace recorded since mid-2021.
The Infometrics-Foodstuffs New Zealand Grocery Supplier Cost Index (GSCI) showed an average 1.7 percent increase in what suppliers charged in October 2026, compared with a year earlier.
According to Infometrics Principal Economist Brad Olsen, recent cost trends have been surprisingly softer than expected, particularly given more intense input cost pressures in the last two months.
“We expect that part of the explanation is timing, with surging higher input costs in the last couple of months still not yet being reflected in supplier costs. Several household staple costs remain elevated and tracking higher, but a variety of other less-essential goods have seen limited cost rises,” said Olsen.
“There seems to be more restraint in passing on higher input costs across various products than was expected, and certainly less than what has been noted by suppliers, with demand for non-essential items patchy and limiting cost pass-through.”
Supplier costs rose across all departments in October compared with the previous year. Butchery costs increased 2.3 percent pa on average, a marked slowdown from the three to four percent pa increases seen in recent months, as beef cost increases stabilised at current high levels.
Frozen food cost increases stayed higher because frozen meal costs rose, even as frozen chicken costs eased back slightly. Seasonal supply shifts saw salad items and tomato costs drop, while winter vegetable costs rose, along with coffee, plant milks, and noodles.
Month on month, just under 2,600 products increased in cost from September to October, the smallest number of increases in six months and after a run of months with more increases.
“Cost increases for October are unlikely to include many, if any, cost adjustments relating to surging fuel prices in September and October, and are more likely indicative of lower fuel prices in July and August,” said Olsen.
More cost reductions for frozen foods and grocery department items than usual likely limited overall cost rises.
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