Cost increases from grocery suppliers to supermarkets have risen further in November, with a still substantially elevated number of products increasing in cost. The Infometrics-Foodstuffs New Zealand Grocery Supplier Cost Index (GSCI) shows a 10.2%pa rise in November 2022, reinforcing the persistence of current pressures on retail supermarket prices.

The Infometrics-Foodstuffs New Zealand Grocery Supplier Cost Index (GSCI) measures the change in the cost of grocery goods charged by suppliers to the Foodstuffs North Island and South Island cooperatives. The Index utilises detailed Foodstuffs NZ data across over 60,000 products Foodstuffs buys to stock in store, 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,” says Infometrics Principal Economist and Director Brad Olsen. Previous analysis shows that supplier costs are the major component of supermarket prices, representing two-thirds of the on-shelf price.

“In November 2022 there were 7,800 items increased in cost, nearly three times as many items as in November 2019 (pre-pandemic). More of these cost increases continue to be of a larger magnitude, with just over 11% of cost changes being for increases of more than 20% in cost,” says Mr Olsen.

Supplier cost increases remain broad-based, with grocery and general merchandise department supplier costs up over 8%pa in November 2022.

“Recent acceleration in the costs of less volatile items like general grocery goods reinforces pervasive cost pressures. Continued large increases in on-farm costs and imported food costs demonstrate the upstream effects of higher input costs being felt further down the supply chain and risks greater cost pressure persistence,” says Mr Olsen.

“These trends underscore the sustained broadness of cost increases, with suppliers passing on higher input costs.”

ENDS

Note:

The Infometrics-Foodstuffs New Zealand Grocery Supplier Cost Index (GSCI) measures the change in the cost of grocery goods charged by suppliers to the Foodstuffs North and South Island cooperatives.

The Index utilises detailed Foodstuffs NZ data, across over 60,000 products, analysed by independent economics consultancy Infometrics to produce the GSCI and publish it on a monthly basis. For more details see www.infometrics.co.nz/product/grocery-supplier-cost-index.