Don't expect grocery bill to go down soon - report


The steep price of groceries is not expected to ease anytime soon thanks to mounting cost pressures on those supplying supermarkets.

An index measuring the change in costs charged by suppliers for products to the Foodstuffs co-operatives shows an increase of 8.7 percent in the year to August.

The Infometrics-Foodstuffs New Zealand Grocery Supplier Cost Index also shows almost three times the number of products increased in cost compared with the same month in 2019, before the pandemic.

Supplier costs represent two-thirds of the price of groceries on the shelf in supermarkets.

Infometrics principal economist and director Brad Olsen said cost increases from suppliers remained broad-based across product categories.

"Sustained higher input costs are driving suppliers to pass on these higher costs," he said.

"The continued rise in both the number and scale of cost increases from suppliers to supermarkets underscores the continued mounting pressure on retail grocery prices."

In August, 9.4 percent of products rose in cost by more than 20 percent, compared to 6 percent of products in 2019.

Olsen said suppliers also faced continued increased labour and import costs.

"The Farm Expenses Price Index has increased at its fastest pace since it started in 1993 and import prices for food and beverages have risen at the fastest rate since 1985," he said.

"Rising cost pressures both domestically and internationally are putting pressure on suppliers across the board."

He said the momentum in supplier cost pressures suggested supermarket costs and broader inflation measures will remain elevated for now.