Media Release: Cost increases from grocery suppliers to supermarkets increase 10.3% in March
Cost increases from grocery suppliers to supermarkets remained at elevated levels in March 2023. The Infometrics-Foodstuffs New Zealand Grocery Supplier Cost Index (GSCI) shows a 10.3%pa increase in what suppliers charged supermarkets for goods in March 2023, marking six months where the average supplier cost increase has been above 10%pa.
“The latest increase in March continues the rapid pace of cost increases so far in 2023, with producers and others up and down the supply chain still facing intense and sustained input cost pressures,” says Infometrics Chief Executive and Principal Economist Brad Olsen.
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. Previous analysis shows that supplier costs are the major component of supermarket prices, representing two-thirds of the on-shelf price.
“Supplier cost increases continue to be broad-based across all departments in March, with produce costs from suppliers to Foodstuffs still up more than 20% from a year earlier,” says Mr Olsen. “Frozen foods and grocery goods also saw an acceleration in supplier costs, with dairy products, frozen vegetables, breads, petfood, and eggs all seeing larger increases.”
“Even with a 21%pa increase in produce costs, this figure underestimates the full increase in produce costs, with a number of fresh produce cost increases being outside the parameters of the index – an unusual situation brought about by the cyclone,” says Mr Olsen.
“Additional analysis this month shows large increases in apples, pears, potatoes, kiwifruit, and kumara in the wake of Cyclone Gabrielle. Some of these increases are not fully captured in the GSCI due to the way Infometrics excludes cost changes over a certain magnitude for data quality purposes.”
“Imported prices for grocery supplies have accelerated further, and input costs for food producers have increased further too. Although produce is currently in the spotlight, cost increases are broad-based across different types of goods.”
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.