Foodstuffs, the two regional and local grocer-owned co-operatives behind New World, PAK’nSAVE and Four Square stores, have reaffirmed their support for the Commerce Commission’s vision for a more competitive, transparent and fair grocery market in New Zealand.
The co-ops also want to recognise the efforts of their 39,000 team members in driving progress toward these goals.
The Commission’s Annual Grocery Report, released today, reiterated its goal of increased grocery competition and outlined a range of regulatory options to achieve that.
“We fully support the Commission’s vision of a grocery sector that delivers value to New Zealanders at the checkout, keeps food pricing under control, and makes sure this small market is working as well as it can for New Zealanders,” said Chris Quin, Chief Executive of Foodstuffs North Island.
“In the space of two years our industry has transitioned into a highly regulated sector where we are increasingly scrutinised and held accountable. We’ve responded quickly and comprehensively to a new and complex landscape.”
Mary Devine, Chief Executive of Foodstuffs South Island, said: “Our people have risen to the challenge, done an incredible amount of work and delivered significant change.”
“The progress we’ve made – whether in keeping prices below food price inflation or expanding wholesale supply to other retailers – demonstrates our commitment to the sector’s shared objectives.” Work was continuing across the co-ops’ 500+ New Zealand stores, their supply chains and support centres to deliver the best value to customers.
Quin said: “We’re making good progress. The Foodstuffs co-ops have kept grocery prices below Stats NZ’s official rate of food price inflation for 24 of the last 27 months, based on a basket of goods comparable with Stats NZ’s basket. This is despite the grocery supply chain facing its highest cost pressures in 30 years.
“Since March this year, our average rate of retail price increases has remained under 1% year-on-year, for that basket. New Zealand now has one of the lowest rates of food price inflation in the OECD. This achievement has been helped by our co-ops’ commitment to absorb the higher rate of cost increases from suppliers – typically 1-2% higher – rather than passing the difference on to consumers.”
In addition to its pricing efforts, the Foodstuffs co-ops have taken significant steps toward improving transparency and removing barriers to competition that they can, says the Foodstuffs team.
“This includes reporting on the overall rate of supplier cost increases via the Infometrics-Foodstuffs NZ Grocery Supplier Cost Index (GSCI), offering wholesale supply to other retailers, supporting small suppliers and innovative new products, investing in new stores and innovations, and consistently delivering value and pricing transparency through initiatives like PAK’nSAVE’s Top 50 Price Check.”
Quin expressed support for the Commission’s plan to explore changes to planning rules and remove barriers for investors to increase competition.
“We see encouraging new investment in New Zealand’s grocery sector as the most effective path to substantially increasing competition,” Quin said.
“It’s important that investors, in New Zealand or overseas, see a market that is receptive to innovation and technology, has few barriers to entry and where investors see an attractive level of opportunity and financial performance.”
Devine said: “The Commission’s report makes it clear that there is more work to be done. We understand the need to keep delivering value for our customers – and we’re fully committed to that.
“We are keeping food price inflation under control and working towards a strong, fair and competitive grocery market where our stores are more than just a place to buy food and essentials; they are integral to the fabric of communities and people’s daily lives.”
