Grocery Report Short On Good News For Consumers

The Grocery Commissioner’s second annual report, while we commend it for its valuable insights, shows once again that Kiwi consumers are paying way over the odds for their groceries, the Grocery Action Group (GAG) says.

“The report is a valuable yardstick on grocery practices and prices in general and contains lots of great talking points,” said Sue Chetwin, GAG’s chair.

“But its devoid of any good news for consumers.

“Clearly our $27 billion grocery market needs big, bold and progressive moves by the government if we are to see healthy competition and lower grocery prices restored.

“On top of the 4.6% increase in grocery prices for the year to May this year, there are other findings in the report that are thoroughly 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.’

“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 their 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 TeAnau, 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.”

Note:

The Grocery Action Group was formed to bring down the prices of groceries for all Kiwis. Our vision is to influence government, the regulators and other parties to deliver a competitive and consumer-focused grocery sector in New Zealand. Our board is made up of consumer, industry, supplier and Māori interests.

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