Fair Go: Comparing prices at major supermarkets

Garth Bray
Source: Fair Go

Fair Go has found one supermarket chain has lowered its prices for a basket of common grocery items in the past six months - something which may surprise shoppers.

A Cantab Fair Go vox-popped in the middle of town sums it up perfectly.

“Tomatoes. You wouldn’t go gold mining any more, you’d go tomato mining.”

Gold is sitting at $81,000 a kilo right now while a Tiktoker openly lamented tomatoes in the supermaket for $15 - so there’s a ways to go really, but you get the point.

We know inflation is up – 2.4 per cent for food in the past 12 months says StatsNZ – but is the cost of grocery shopping keeping pace or getting ahead? And are there still bargains to be had?

Fair Go has gone back to the supermarkets for another round of price checks. We did this extensively through February, March and April to look for specials.

Discounts, everyday low prices, super savers, all of these catchphrases rely on us being able to compare with the usual price, but as Fair Go found, there is no rule to define what that “usual price” should be.

Supermarket trolley.

That leaves supermarkets able to frame our perceptions and leave us thinking something is cheaper than usual when it may not be. But are they doing that?

Fair Go has tested this by surveying the prices of grocery items for 10 weeks - pantry staples like milk, bread and eggs, more costly proteins like cheese and bacon, and a few treats like fizzy drinks and chocolate. We left produce out because that does fluctuate seasonally, so we can’t give you the lowdown on the golden tomatoes.

But what Fair Go did find was that two thirds of the items were on some sort of special price at least half the time. Some were never at their so-called usual price. So, is a special all that special or is it in fact just the usual price?

Fast forward to spring, nearly six months on. Aucklanders are still in lockdown, some in Waikato have joined them - nau mai, haere mai, welcome to the noho kāinga - staying at home.

Supermarkets have been one place we can all go, so armed with all that price data on the last visit on April 15 and with a 10-week average to help give it context, Fair Go has gone shopping.

We have priced a basket of 13 items for which we already had that tracking data at the same three Auckland supermarkets - a PakN’Save, a Countdown and a New World in the same area, competing with each other for your grocery dollars on September 29.

At New World, that basket has risen 4.3 per cent - $74.68 in the basket would now cost you $77.93 to buy.

At PakN’Save that basket is cheaper but has also risen 2.9 per cent - from $62.37 to $64.23.

At Countdown – what was $74.09 in April would now cost $72.00 – a drop of 2.8 per cent.

Remember annual price inflation for food is running at 2.3 per cent according to the basket that StatsNZ uses, which is much more detailed and established than Fair Go’s basket and study.

Woolworths NZ which owns the Countdown chain has nothing to add, but Foodstuffs NZ representing New World and Pak ‘N’ Save wants to say that in the past six months it has faced widespread and significant pressure from suppliers to pay them more.

Foodstuffs NZ’s Antoinette Laird adds that Covid-19 had seen “an exponential rise in commodity, fuel and power prices worldwide, an international shipping crisis and a skills shortage in New Zealand".

Despite that, they continue to offer specials at about the same number as before.

Both Woolworths and Foodstuffs NZ concede they need to make changes, in response to a market study report from the Commerce Commission. The big players deny the main charge they are making an unreasonable rate of return, arguing it looks much lower once you calculate using methods the commission has applied previously in other industry studies it has conducted.

But they are:

· Accepting the need for a code of conduct for the grocery industry to protect shoppers and suppliers

· Making unit pricing standard so shoppers can compare fairly between different brands and stores.

· Woolworths AKA Countdown even wants the Commission to define the “usual price” clearly so shoppers can know what their specials are based on.

· Overturning lease and land deal clauses that prevent another competing supermarket from opening in the same mall or neighbourhood as an established one.

It’s a big shake up that will only get bigger as more rivals arrive.

US mega-store Costco promises to beat local supermarkets by 25-30 per cent once it opens in northwest Auckland next year. The Warehouse is selling more groceries and Woolworths says it is inevitable that German-owned discount chain Aldi will spread from Australia to New Zealand.

And there’s still that Commerce Commission inquiry underway. The ComComm says that on 24 September 2021, the Government extended the timeframe for the market study. It’s now required to publish its final report by 8 March 2022. After that it is up to the Government to decide how to respond.