Supermarkets forced to 'consistently and clearly' show pricing by weight or volume from end of August

The Government has announced New Zealand's supermarket chains will be forced to show the pricing of products by weight and volume later this month.

"Supermarkets will be required to clearly and consistently display unit pricing for grocery products, such as the price of a product per kilogram or litre," a statement from Commerce and Consumer Affairs Minister Duncan Webb said.

In a report on competition within the grocery sector last year, the Commerce Commission said it wasn't "working well for New Zealand consumers" - with smaller retailers unable to compete with the two major players Foodstuffs and Countdown.

The Government has responded so far by establishing a Grocery Commissioner to monitor unfair behaviour in the sector, while also forcing supermarkets to sell groceries to competitors at set prices if they didn't open up their wholesale offerings to other retailers adequately.  

Now, in what is being described as "a step forward in the Government's wider work to increase competition in the retail grocery sector", Dr Webb announced on Thursday chains would be required to "consistently and clearly" display unit pricing.

"This helps make working out whether tomatoes are cheaper at $6.99 per 500g punnet, $10.49 for a 700g bag, or $11.99 a kilo so much easier for Kiwi shoppers," Dr Webb said.

"Unit pricing will support inter-brand competition and encourage grocery retailers to compete on best value for money, benefitting customers in the long term."

The new interventions would help New Zealanders "make informed choices to suit their needs while shopping", said Dr Webb.

"This is particularly helpful where products are sold in different-sized packaging and by various brands," he said. "While the regulations come into force on August 31, there will be a transitional period before compliance is mandatory, providing retailers time to put the required systems in place."

Spencer Sonn, the managing director of Countdown's parent company Woolworths NZ, said earlier this year the company already had unit pricing and had "consistently supported making this mandatory both throughout and before the market study process".

Sonn said Woolworths was "further working to make pricing more clear across our stores - including with the rollout of electronic shelf labels".

"We're proud to have played a constructive role throughout the market study process and we're already well underway with implementing the Commerce Commission's recommendations," he said after the June passing of the Grocery Industry Competition Bill in Parliament. 

The company was "looking forward to being a part of the future of New Zealand's dynamic grocery sector", he said.

Foodstuffs, the parent company of supermarket giants including New World and Pak'nSave, also said it supported mandatory industry-wide unit pricing standards.

"We're simplifying our pricing and promotions, to make them easier for our customers to understand," the company said on its market study quarterly reporting dashboard. "We're delivering on our commitment to being transparent and accountable on grocery price changes and the drivers behind them."

Last year's Commerce Commission report said supermarkets were earning $365 million per year in excess profits due to the lack of competition in the sector for the 2015-2019 period.

The Government agreed to implement 12 of the Commerce Commission report's 14 recommendations.

However, food price inflation has continued to skyrocket since the market study. Based on the latest figures, food prices were up 12.5 percent year on year.