The pace of supplier cost increases to Foodstuffs supermarkets picked up slightly in November, with the Infometrics-Foodstuffs New Zealand Grocery Supplier Cost Index (GSCI) showing an average 2.1% 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%pa rise recorded in October,” says 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 some further cost increases for specific items, there is still some cost pressure clearly remaining in the system.”

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 their 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.

“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 items per month,” says Mr Olsen. “A significant number of increases continue to be of larger magnitudes, with nearly 1-in-10 being increases of more than 20% up on the previous month.”

“Year on year, costs in November 2024 remained higher for all departments compared to November 2023. There has been some slight reacceleration in cost increases in some departments. Bakery and chilled foods costs were both up 3.1%pa, driven by recent rises for dairy products like butter and milk. Chocolate and cooking oil costs have also continued to rise, keeping general grocery cost increases elevated, at 2.3%pa.”

“Cost increases seen recently for a number of products are linked to lower global production, which will take time to change. There are also some 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.”

ENDS

Note:

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 and South Island cooperatives.

List cost refers to the cost suppliers charge retailers before trade spend is applied; trade spend being any form of discount provided by a supplier to allow their goods to be discounted.

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.