The pace of supplier cost increases to Foodstuffs supermarkets remained steady in May, with the Infometrics-Foodstuffs New Zealand Grocery Supplier Cost Index (GSCI) showing an average 2.0% increase in what suppliers charged in May 2025, compared to a year earlier.

“This result is the third month in a row recording a 2.0%pa annual increase, highlighting that broad grocery supplier cost increases are more stable,” said Infometrics Chief Executive and Principal Economist Brad Olsen. “However, a number of key items continue to increase in cost at a more rapid rate as global events influence cost trends.”

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.

Supplier costs rose across all departments in May. “A number of fruits and vegetable costs rose over the month, alongside higher beef costs as international protein prices remain elevated,” said Mr Olsen. “Butter, cheese, and yoghurt costs rose further, with lower dairy supply globally amid strong demand which has pushed up international and domestic costs. Chocolate and coffee costs rose further in May, but olive oil costs have levelled off. Supplier costs also rose across a number of nut varieties, and for potato chips.”

Month on month, nearly 2,900 products increased in cost in May 2025 compared to April. “That is broadly in line with the 12-month moving average of 2,700 a month, However, there were a higher number of larger magnitude cost changes in May - both cost increases and decreases. Around 17% of cost movements were increases of more than 20%, and nearly 1-in-10 were declines of more than 20%.”

“Cost escalation concerns remain, with higher import costs occurring in the March quarter, and at a faster pace than previously seen,” said Mr Olsen. “New Zealand commodity prices have increased too, with higher dairy, meat, and horticulture prices globally adding pressure on supplier costs for these items domestically. Improving supply of some international inputs has contributed to some supplier cost increases levelling out, but costs still remain at elevated levels.”

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.