Supermarkets are paying noticeably higher supply costs compared to the same time last year, according to new data from the Infometrics-Foodstuffs Grocery Supplier Cost Index (GSCI).
The Infometrics-Foodstuffs GSCI measures the change in the cost of grocery goods charged by suppliers to Foodstuffs' North and South Island cooperatives, utilising data from over 60,000 products bought by Foodstuffs to stock their shelves.
According to the latest data, the GSCI rose 10.2% in November 2022 compared to the same time last year, raising supply costs for every supermarket department.
There were 7800 items which increased in cost in November 2022 - "nearly three times as many items" as in November 2019, before the Covid-19 pandemic, Infometrics economist Brad Olsen said.
"More of these cost increases continue to be of a larger magnitude, with just over 11% of cost changes being for increases of more than 20% in cost," he said.
Suppliers of produce, butchery and seafood items faced the highest increased costs for grocery items in the past year. (Source: Breakfast)
The biggest department increases were seen in produce, butchery and seafood, which rose by 19%, 12% and 11% respectively.
Olsen said the higher supply costs can be attributed to continual large increases on imported food costs and on-farm costs, which "demonstrate the upstream effects of higher input costs being felt further down the supply chain and risks greater cost pressure persistence".
He says supplier costs are a major component of supermarket prices, representing two-thirds of the price marked on shelves.
"These trends underscore the sustained broadness of cost increases, with suppliers passing on higher input costs."
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