Sue Chetwin, chair of the Grocery Action Group, said the Grocery Commissioner’s second annual report revealed that Kiwi consumers are paying far too much for their groceries.
“On top of the 4.6% increase in grocery prices in the 12 months to May this year, there are other findings in the report that are alarming,” she said.
“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 troubling fact, according to Chetwin, is that the prices supermarket chains pay their suppliers are effectively subsidised by about $5 billion in rebates, discounts, and promotional payments provided 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 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 locations such as Te Anau, which has just one large supermarket and a Four Square, consumers are paying 33% more for grapes and 15% more for Woolworths brand flour.
“Nescafe coffee, which is on special in both Te Anau and nationwide, is 14.8% more,” Chetwin added.
She characterised this “geographic price gap” as unacceptable and that fair prices should not vary according to your postcode.
Chetwin said she expects to hear from the Minister for Economic Growth, Nicola Willis, regarding her plans to repair our “broken grocery market.”