New research is grim reading for food shoppers, with 84 per cent of participants saying they’ve had to drop items from their list because of price rises.
A survey from Consumer NZ asked 1000 shoppers if they ditch or switch items from the shop due to cost, it found 89 per cent have made substitutions to cheaper items.
The difference between shopping at the cheapest and most expensive supermarkets looks to be shrinking even as prices rise everywhere, according to mystery shopping results from Fair Go this week.
Two out of three Auckland supermarkets tested with a basket of 13 grocery items showed prices have been rising much faster than inflation, leaving less competition between all three than a year ago.
The Fair Go mystery shop found prices for milk, cheese, eggs and bacon are the main culprits driving the total bills higher.
In the year to February, the basket at Countdown rose more than 13 per cent - well ahead of inflation of 5.9 per cent.
A statement from Countdown owner Woolworths says its specials account for some of this:
“Promo pricing can obviously alter the cost of a basket of goods quite significantly on any given week, so while there is an element of inflationary pressures, mostly it’s a matter of timing and the particular products.”
Visits to New World by the Fair Go team showed prices started and finished highest - but increased by just under 4 per cent.
Foodstuffs represents New World – spokesperson Emma Wooster says: “The average price increase on products we’ve seen coming through this year is around 7 per cent, so they did an amazing job.”
Foodstuffs also speaks for Pak’N’Save where the Fair Go basket went up nearly 11 per cent. That’s also way ahead of inflation or that 7 per cent figure New World seems to be chuffed about coping with. The total price at Pak’N’Save was still cheapest.
“It’s really pleasing to see Stickman 'cheap as' in Fair Go’s basket,” says Wooster.
It’s not just consumers who feel like they’re being stung, suppliers are also worried. (Source: Sunday)
Fair Go stuck with the same products to track their prices over a year, but both supermarkets challenged that method.
Foodstuffs even showed a basket of items at Pak’N’Save dropped in price if people switched to buying whatever was cheapest – often Foodstuff’s own label, Pams.
“Swapping brands when there was a viable Pams or Value alternative, we got the price down a further 25 per cent to $56.47!” says Wooster.
Both big players cited a list of concerns - supply chain shortages, rising fuel costs, bad weather and a shortage of skilled workers, but said profits aren’t the main thing affecting prices.
“Supermarket competition and profitability is only an extremely small part of what contributes to prices at the till, and there are significantly greater forces impacting retail prices for Kiwis - especially right now,” reads Countdown’s statement to Fair Go.
Foodstuffs says it takes an average of 4 cents profit in every dollar spent at its stores. Countdown says it takes 2.3 cents in the dollar.
Consumer NZ chief executive Jon Duffy accepts inflation is part of the problem, but not the whole picture he sees.
“The bigger questions is, should supermarkets be in a position where they can freely take the level of profits that they are taking at the moment, without any real competition being offered.”
Woolworths and rival Foodstuffs effectively control the $22 billion grocery market in New Zealand but that has been under scrutiny by the Commerce Commission which is about to deliver its final report to the Government.
“In a normal competitive market you’d have competitors knocking heads together trying to get that price down to attract custom. We just don’t see that in the supermarket industry,” says Jon Duffy.
Consumer NZ’s survey also asked which grocery items people would consider luxuries.
Meat topped the rankings; 54 per cent say meat is a luxury. In second place 42 per cent say fresh fruit while 11 per cent say sanitary items like tampons and pads that are a basic requirement for many, are luxuries.
“When we’ve got costs in other areas increasing – transport costs, housing costs - then that’s putting added pressure on families and further reduces the spending they have for food,” says registered nutritionist Dr Claire Smith of Otago University Department of Human Nutrition.
The study has been running since 1970 and now surveys prices in sixteen supermarkets to work out the cost per gram of basic and essential food groups. Shoppers need to make almost as much effort for themselves.
“It takes a lot of planning to meet food guidelines with only a minimal budget,” says Dr Smith.
Covid- related shortages and restrictions have made checking prices much harder, but in 2020 an Auckland household of four – two adults and two children aged 10 and 4 would have needed to spend at least $227 week to have enough nutritious food to live on, as long as they also know how to cook and have some pantry basics already on hand. Figures were slightly cheaper in Wellington and Dunedin and cheapest in Christchurch where $217 bought the same amount of nutritious food.
The 2022 numbers will be out later this year when Dr Smith expects a much bigger rise in the minimum spend to still feed our basic needs.
TIPS FOR FEEDING THE NEED
Check the Otago Food Cost Survey for the recommended minimum amounts of proteins and carbohydrates in your diet – are you getting enough of some - and maybe too much of others?
If you’re sharing a flat, try to cook together or at least shop for basics together to get the benefits of bulk buying.
Be wary of convenience foods; try to plan meals for the week and shop to that plan. to help stick to your budget.
What do you mean, you don’t have a budget? Make a budget.
Enjoy this story? Follow Fair Go on Facebook, Twitter, Instagram and TikTok.
SHARE ME