No good news for consumers in grocery report

Media statement

The $27 billion grocery market needs big, bold and progressive moves by the Government if we are to see healthy competition and lower grocery prices, the Grocery Action Group said today.

The Grocery Commissioner’s second annual report showed once again Kiwi consumers were paying way over the odds for their groceries, Grocery Action Group chair Sue Chetwin said.

“It was devoid of any good news for consumers,” she said.

“On top of the 4.6% increase in grocery prices in the 12 months to May this year, there are other findings in the report that are alarming.

“For instance it notes we are paying higher than the OECD average for groceries even though we earn well below the average OECD wage.

“Another disturbing fact is the ‘prices (that the supermarket chains) pay their suppliers are subsidised by around $5 billion in rebates, discounts and promotional payments paid by (the) suppliers’,” she said.

“The lack of competition is the key reason why New Zealanders are paying too much for their groceries, and in places where there is no competition the markups are even higher though overheads such as rent are often lower. 

“In rural areas and smaller towns where New Zealand’s supermarket choices are narrow or non-existent, the report confirms what those living there already know – that consumers pay a premium for the lack of competition.

“In places like Te Anau, where there is only one large supermarket alongside a Four Square, consumers are paying 33% more for grapes, 15% more for Woolworths brand flour, and Nescafe coffee which is on special in both Te Anau and nationwide, is 14.8% more. 

“This kind of geographic price gap is unacceptable. Fair prices shouldn’t depend on your postcode.

“We are eagerly waiting on hearing from the Minister for Economic Growth, Nicola Willis, on how she proposes to restore our broken grocery market.”