Kiwis now trust supermarkets less than banks: Consumer NZ survey

NZ Herald ,
Publish Date
Fri, 27 May 2022, 8:35am

Kiwis now trust supermarkets less than banks: Consumer NZ survey

NZ Herald ,
Publish Date
Fri, 27 May 2022, 8:35am

Kiwis now trust supermarkets less than the banking industry, research by Consumer New Zealand has found.

The percentage of those who said they did not trust supermarkets has risen from 17 per cent in June last year to 32 per cent.

That was higher than banking industry in which 29 per cent of those surveyed said they did not have trust.

Jon Duffy, Consumer NZ chief executive, said the decline in trust in supermarket was concerning.

"It's particularly concerning that consumer trust in a sector that is essential to our wellbeing as a nation, and is virtually impossible for consumers to do without, is seeing such a marked decline."

Duffy pointed to the rising cost of living and the Commerce Commission's supermarket market study as drivers for the decline in trust.

"The Commerce Commission's study into the grocery sector found the duopoly is consistently making profits in excess of what it should," he said.

"Couple that with cost-of-living challenges, and no wonder there has been an erosion of trust in the supermarket industry."

Food prices rose 6.4 per cent in the year to April 2022 and Consumer's research found New Zealanders are preparing themselves to spend more on groceries.

In June 2021 a quarter (24 per cent) expected their groceries to increase. By April 2022, more than 40 per cent (43 per cent) anticipated an uptick in grocery expenditure.

And concern about the price of food has jumped significantly.

Groceries went from the eighth biggest financial concern in June 2021 to third in April 2022, beaten only by rent and mortgage payments.

Duffy said Consumer NZ had also noted that in the last year New Zealanders were incurring an increasing proportion of debt on essential items like groceries, fuel and bills.

Both major supermarket chains have recently taken steps to freeze or drop prices.

Earlier this month Countdown announced it would freeze the prices on 500 items over the winter months.

A week later Foodstuffs which operates Pak'nSave, New World and Four Square said it would slash the price of food by an average of 10 per cent across 110 of its most-shopped grocery items.

Duffy said some of the moves by the supermarkets would be helpful for struggling consumers.

"... however we don't think the supermarket giants should be applauded for their efforts. We should be asking how a lack of competition has been allowed to create this situation in the first place."

Consumer is calling for measures to increase competition in the sector and has launched a petition which asks the Minister of Commerce and Consumer Affairs, David Clark, to go further than the commission's recommendations and bring about meaningful change in the sector.

To date, 74,000 people had signed the petition, and it was aiming for 200,000 signatures, Duffy said.

Foodstuffs boss Chris Quinn has hit back at claims the $22 billion industry is making excess profits of $1 million each day as claimed.

"We need to be really clear - we don't make excessive profits, and we don't make an excessive profit of a million dollars a day. The claim that is based on is an incorrect assumption," he told the Herald.

The Government made some moves to clamp down on the sector in the Budget.

It bought in a new law to stop supermarket chains from blocking competitors trying to secure land for new stores.

The Government is also expected to announce plans for a grocery sector regulator soon.