ZB

Foodstuffs commits to reducing food prices by 10 per cent

Author
Aimee Shaw, NZ Herald,
Publish Date
Wed, 11 May 2022, 12:12pm
(Photo / Getty)
(Photo / Getty)

Foodstuffs commits to reducing food prices by 10 per cent

Author
Aimee Shaw, NZ Herald,
Publish Date
Wed, 11 May 2022, 12:12pm

Supermarket operator Foodstuffs, which owns Pak'nSave, New World, Four Square and Gilmours, has announced it will reduce the price of food by an average 10 per cent on more than 100 groceries.

From Monday May 16, Foodstuffs North Island and South Island will "roll back the prices" on some of its most shopped grocery items to what they averaged between January and April 2021.

The reductions would be implemented at all New World, Pak'nSave, and Four Square stores on items such as meat, butter, cheese, vegetables and nappies. Most of the price reductions would be across its Pam's and Value brand ranges.

The reductions is expected to result in weekly savings of $500,000 for customers, Foodstuffs said.

Foodstuffs NZ managing director, Chris Quin said the co-ops considered the challenge of rising food prices and where rising costs were hitting shoppers hardest;  using its data insight teams to identify the everyday products that its customers brought most often.

"Our customers buy more than 1.3 million of these products each week, so we then looked at the 13-week average price of these items across 25 January to 25 April last year and  are dropping the prices back to those levels from Monday 16 May until 14 August 2022."

The move by Foodstuffs follows that of rival supermarket chain Countdown, which last week announced it would implement a prize freeze during winter.

Countdown said it would not be increasing - or decreasing - the price of more than 500 essential grocery items over winter. This included items such as diced tomatoes, butter, cheese, sugar, flour, deli meats, hot roast chicken, carrots and pumpkin.

Countdown managing director Spencer Sonn said the move aimed to "buck the current inflationary environment" and that the company was "receiving millions of dollars of cost increase requests every month from suppliers who were facing higher fuel, raw material and freight costs."

The average increase request by its suppliers was just over 9 per cent, it said.

"As we head into the chillier months, the cost of living is undeniably top of everyone's minds," said Sonn.

"We want to help Kiwis' money go further despite the pressures everyone is facing with increasing costs, and that's why we've pledged that the price of these 500-plus essentials won't change."

The $22 billion grocery sector - namely New Zealand's two major supermarkets Foodstuffs and Countdown - has come under scrutiny over the past few months following a market study by the Commerce Commission which has found the lack of competition problematic.

The duopoly is "not working for consumers", according to the commission.

It was revealed in March that supermarkets in this country make in excess of $1 million in profits each day.

Commerce and Consumer Affairs Minister David Clark said consumers would get better prices if there was more competition, and has pledged to take action to achieve that.

As a first step, the Government would be making it easier for supermarkets to enter the market by opening up more sites.

Moving forward there would be a new regime around wholesale supply, as well as a mandatory code of conduct, addressing issues like bargaining power, and resolution schemes, he said.

Inflation hit a 30-year high of 6.9 per cent for the year to March. Meanwhile, food prices rose sharply in the March quarter, up 3.1 per cent, influenced by fruit and vegetables (up 9.3 per cent) and grocery food (up 2.4 per cent).

Earlier this week, Consumer NZ launched a petition calling for fairer food prices amid major cost increases as inflationary pressures hit grocery prices.

Consumer NZ started the petition calling on the Government to put ordinary people first - saying supermarkets' excess profits are a "slap in the face" to Kiwis struggling to put food on the table.

The watchdog launched the petition - Stop the Super Profits - asking the public to get behind it to show the Government and Minister of Commerce and Consumer Affairs David Clark that people want action immediately.

Consumer NZ chief Jon Duffy said they wanted to create conditions for more competition in the grocery sector, which will ultimately result in fairer prices at the checkout.