The cost suppliers charge supermarkets continues to increase but at a slower pace, new data has found.
The latest Infometrics-Foodstuffs Grocery Supplier Cost Index shows the prices suppliers charged supermarkets for goods increased by an average of 2.9 percent in May when compared to the same time last year. This is compared to 3.2 percent in March.
Infometric principal economist Brad Olsen said the annual rise has only slowed slightly in recent months when compared to the annual peak of 10.6 percent in December 2022 to 4.5 percent in December 2023.
Olsen said this trend reinforces recent views that cost pressures are currently on track to level out at a slightly higher rate than before 2022.
Appearing on AM, Olsen said the good news is on-farm costs have been broadly flat for the past six months.
"That seems to be flowing through to the supplier cost, with produce cost only up one percent, quite a stark difference from a year or so ago when they were up 22 percent. The likes of spring onions and other green vegetables have also seen better cost in recent times," he said.
The Infometrics-Foodstuffs New Zealand Grocery Supplier Cost Index (GSCI), commissioned by Foodstuffs New Zealand, measures the change in the list cost of grocery goods charged by suppliers to Foodstuffs by using data across over 60,000 products. Every month, the Index tracks what it costs supermarkets to buy goods to put on the shelf.
Olsen said just under 2900 items increased in cost in May, up around 50 percent from the number of items that rose in cost in May 2021.
Around a tenth of May's cost changes were rises of more than 20 percent but there were also some cost declines, with nearly a fifth of cost changes being monthly declines under 20 percent, he said.
Costs in May 2024 remained higher for all departments compared to May 2023, but these cost increases slowed further. Produce costs are up just 1 percent and general grocery costs are up 3.4 percent - the slowest annual increase since March 2022. Chilled and frozen goods have seen a continued moderation in annual cost increases, and butchery cost growth remains at 2.0 percent.
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