Annual cost increase at three-year low
Supplier costs to New Zealand supermarkets rose by 2% in October, the lowest annual increase in three years, according to the Infometrics-Foodstuffs New Zealand Grocery Supplier Cost Index (GSCI).
“This annual increase is the lowest in around three years, with the annual increase in September 2021 also at 2%,” said Brad Olsen (pictured above), Infometrics CEO and principal Economist.
The GSCI, which tracks more than 60,000 products, shows a continued downward trend in supplier cost increases since late 2022.
Fewer monthly cost hikes in October
In October, fewer items saw cost hikes, with only about 2,300 products rising in price compared to the previous month.
While some increases remain high, Olsen highlighted that “around one-in-10 cost changes in October 2024 were a larger than 20% increase.”
However, the monthly increases continue to ease from the elevated levels seen between 2022 and 2024.
Departmental and product trends
Year-on-year, supplier costs were higher across all departments compared to October 2023, with certain items seeing sharper rises.
Produce saw only a modest 1.3% increase, thanks to lower vegetable prices, while higher butter and spread costs kept chilled foods on the rise.
“Noodles and cooking oils saw some of the largest increases,” Olsen said, attributing the latter to global production shortages.
Concentrated inflation rather than broad-based
Olsen observed that supplier cost hikes are more concentrated in select items like cooking oils and chocolate, driven by global supply issues, rather than widespread inflation.
With slowing wage growth and easing business input costs, this trend may continue, offering some relief in supermarket pricing.
Read the Infometrics media release.
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