March was the sixth month that the average supplier cost increase has been above 10%
Cost increases from grocery suppliers to supermarkets remained high in March, according to the latest data from Infometrics.
The Grocery Supplier Cost Index (GSCI) showed a 10.3% rise in what supermarkets were charged for goods in March – the sixth month that average supplier cost increase has been above 10%.
Brad Olsen (pictured above), Infometrics chief executive and principal economist, said the latest hike continued the rapid pace of cost rises this year to date, “with producers and others up and down the supply chain still facing intense and sustained input cost pressures.”
The Infometrics-Foodstuffs New Zealand GSCI measures the change in the cost of grocery goods charged by suppliers to the Foodstuffs North Island and South Island cooperatives, using Foodstuffs NZ data across more than 60,000 products the company buys.
Previous analysis showed that supplier costs represented 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,” Olsen said. “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.
“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.”
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