Media Release: Grocery costs from suppliers rise 7.9% according to new Index from Infometrics and Foodstuffs NZ
New analysis from Infometrics, commissioned by Foodstuffs New Zealand, showcases the increasing cost of grocery supply as inflationary pressures build for suppliers.
The new 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.
“This 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.
“Grocery supplier cost increases have accelerated to 7.9%pa in July 2022, which is driving higher prices,” says Infometrics Principal Economist and Director Brad Olsen. “The cost of groceries from suppliers have continued rising increasingly rapidly since April last year, and this sustained growth in input costs has been across the board.”
The Index is the first of its kind in the grocery space. It has been commissioned by Foodstuffs New Zealand and is produced by independent consultancy Infometrics using detailed Foodstuffs NZ data to examine, each month, how the costs of grocery products from suppliers to Foodstuffs North and South Island cooperatives have changed.
“The Index helps show how the cost of grocery goods is increasing across the country, as suppliers face a tight labour market, rising prices for various inputs, higher transport costs, and global and local pressures,” says Mr Olsen.
The July 2022 update shows the cost of produce (fruits and vegetables) is a key driver of higher overall grocery costs, with a 16% increase in the supplier cost for these items. The cost of butchery and seafood goods have also been rising considerably, up more than 9% each over the last year.
More products are increasing in cost, and with larger rises, according to the analysis. “The number of items increasing in cost in July 2022 is more than double the number of items back in July 2019, prior to the pandemic,” says Mr Olsen. “Cost increases are also becoming larger, with 8.8% of all items that changed cost in July 2022 increasing by 20-80% – well above the 7.2% recorded in July 2019.”
The new Index will be published monthly by Infometrics, around the second week of the month, and can be found at www.infometrics.co.nz/product/grocery-supplier-cost-index.
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.