Grocery cost increases slow, index reveals
The annual rate at which grocery suppliers increase prices for supermarkets has further decelerated, according to the latest data from the Infometrics-Foodstuffs New Zealand Grocery Supplier Cost Index (GSCI).
In March, the index recorded a 3.2% year-on-year increase in the cost of goods supplied to Foodstuffs supermarkets.
“The annual pace of supplier cost increases has now been slowing for 13 months, having moderated from a peak of 10.6% in December 2022,” said Brad Olsen (pictured above), Infometrics CEO and principal economist. “Grocery supplier costs are still rising on average, but at a much more moderate speed.”
The GSCI, a collaboration between Infometrics and Foodstuffs New Zealand, tracks the list cost changes of more than 60,000 products supplied to the Foodstuffs North Island and South Island cooperatives. It offers a comprehensive view of how supplier costs are evolving, indicating that these costs form two-thirds of the final price consumers see on shelves.
March overview
Olsen said that nearly 2,300 items saw a price increase in March from the previous month, nearly twice the number from March 2021. Despite this, the month also saw several cost decreases, attributed mainly to seasonal adjustments in produce prices.
Departments across the board saw a rise in supplier costs, with frozen and chilled foods leading the way due to increases in frozen vegetables, potato products, and several dairy items, the Infometrics-Foodstuffs index showed.
Toward a new normal
Olsen suggested that the current data might indicate a shift in the baseline for annual supplier cost increases, proposing that the “new normal” could see annual increases settling at 1-1.5 percentage points above the pre-2021 inflation levels. This reflects the ongoing adjustment to higher cost pressures experienced since 2021.
Read the original report on the Infometrics website. Compare the latest figures with the previous results here.
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