Costs from grocery suppliers to supermarkets increased 1.8 percent per annum in February, according to new data.
The pace of supplier cost increases to Foodstuffs supermarkets slowed further in February, with the Infometrics-Foodstuffs New Zealand Grocery Supplier Cost Index (GSCI) showing an average 1.8 percent increase in what suppliers charged in February 2025, compared to a year earlier.
“February’s 1.8 percent pa increase is the slowest annual gain recorded since July 2021, and the first time below two percent pa since August 2021. Importantly, this increase shows supplier costs are still rising, but at a slower pace than previously,” said Infometrics Chief Executive and Principal Economist Brad Olsen.
“As we’ve said recently, despite current volatility, the annual increase in the Index continues to trend around 2.0 percent pa.”
The Infometrics-Foodstuffs New Zealand Grocery Supplier Cost Index (GSCI), commissioned by Foodstuffs New Zealand, measures 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 utilises detailed Foodstuffs NZ data across over 60,000 products the Foodstuffs co-ops buy to stock in its more than 500 stores, making it the largest dataset of its type in New Zealand, to give a real-time view on supplier cost changes.
Every month, the Index tracks what it costs supermarkets to buy the goods to put on the shelf. Previous analysis shows that supplier costs are the major component of supermarket prices, representing two-thirds of the on-shelf price.
“Higher costs for bakery and chilled foods continue to drive overall cost trends,” said Olsen.
“In February, bakery cost increases remained high, at 3.7 percent pa, followed by chilled foods, which saw a 3.6 percent pa gain, up from 3.3 percent pa in January. Rising butter costs were key to this increase, as well as cream and milk, with global dairy prices still up 15 percent on last year. Chocolate and coffee costs also noticeably rose, due to global cost increases, while noodle, spaghetti, and baked bean costs also recorded a cost increase, affecting the grocery category gain.”
Month on month, just under 2,500 products increased in cost in February 2025 compared to January. This result was the lowest number of February increases counted since 2021, after the same occurrence in January.
“February saw a lower number of cost increases for produce and grocery items than other recent February months,” said Olsen.
“More broadly, looking at all supplier cost changes in February, there were a larger number of small cost decreases – mostly for produce – and of larger increases – mostly for general grocery products.”
Olsen said overall cost pressures appear more settled at present, with produce in particular showing more usual seasonal patterns, and less upward pressure as on-farm costs stabilise.
“Imported costs remain a worry, with a small but significant number of overseas-sourced products showing higher costs, and cost increases of a larger magnitude. Global prices for New Zealand-grown dairy and beef are also sitting higher.”
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