Supermarket price wars: Foodstuffs reduces prices on 110 items

Source: 1News

The battle over the rising cost of living and prices at the supermarket check-out has heated up, with Foodstuffs announcing its own pricing changes.

After Countdown last week revealed it was freezing the prices of over 500 items for three months, Foodstuffs, which includes the New World, Pak'nSave and Four Square chains, on Wednesday said it was reducing the price of 110 items to 2021 levels.

It includes some frozen and fresh fruit and vegetables, some butter and cheeses, and some nappies and soap.

"You won’t see highly seasonal fresh fruit and vegetables like broccoli and spinach in the basket, because we trade constantly to get customers the best deal on these each day, and will continue to deliver the best value through winter," Foodstuffs said.

Managing director Chris Quin says from Monday, the 110 items will drop in price to what they averaged between 25 January to 25 April last year. The price drop will last until August 14.

"Globally, food cost increases and the pace of food price inflation are at near record levels. While New Zealanders are facing rising costs across the board, the supermarket checkout is the place where all of the cost pressures are coming to a head as food producers and manufacturers are being hit with every global and domestic price hike," Quin said.

"Transport and fuel costs, global supply chain issues, currency changes, skills shortages and increases in the price of equipment and ingredients are just a few of the challenges our suppliers are facing, and are adding to the cost of growing, making and retailing groceries in Aotearoa."

He says owners will bear the cost of the price slash, not suppliers.

"This is not funded by any of our suppliers... this is an investment our supermarket owners are making back to their customers."

Quin insists customers won't be out of pocket either, supermarkets will not be increasing the price of other goods to make up the shortfall.

"We’re not recovering the funding anywhere else... this exercise is completely separated from the rest of our pricing and promotions programme.

"We won't be doing anything we wouldn't normally be doing."

Foodstuffs says the price drop will average 10%.

READ MORE: Countdown price freeze 'admission' of role in food crisis - Consumer NZ

The moves come amid a cost of living crisis, with inflation at 6.9% - its highest rate in over three decades.

Countdown last week said it was freezing the prices despite having nearly 1000 requests in less than a year from its suppliers to increase costs due to the higher fuel, raw material and freight costs they are facing.

It has been pointed out, however, few of the items were fresh fruit and vegetables, and many of the items were Countdown's own home brand products.

There were also alcohol and salmon products and dozens of herbs and spices.

The only vegetables included in the price freeze were onions, carrots and pumpkin.

Countdown told 1News last week most fruit and vege, dairy and meat products were subject to seasonal conditions and volatile market prices and therefore were too difficult to add them to the price freeze list.

"If we can add more fruit and veges over the next few months, we will," a Countdown spokesperson said.

Consumer NZ, which on Tuesday launched a petition in a bid to combat high grocery prices, said last week Countdown's move was "essentially an admission" that they had played a role in the cost of living crisis.

A recent Commerce Commission study found competition in the supermarket sector wasn't working well for consumers.