The Foodstuffs cooperatives are extending their rolled back pricing on key products to early 2021 levels for a further three months at PAK’nSAVE, New World and Four Square, as well as introducing new everyday low pricing initiatives to help New Zealanders find value at the checkout.
Foodstuffs North and South Island are cooperatives of 460 local grocers who own and operate New World, PAK’nSAVE and Four Square stores across New Zealand.
In May the co-operatives rolled back prices to what they were in early 2021, immediately reducing prices by an average of 10% on more than 110 everyday items, as record inflation continued to push up food costs. To date, the Price Rollback initiative has provided average savings of $1 million per week with 25 million rollback items sold nationally.
In the four months since the rolled back prices began, the cost of groceries supplied to Foodstuffs from its suppliers has increased by an average of 7.9%, and New Zealand Food Price Inflation has increased to 6.6% in June. The co-operatives’ continued focus on value has meant Foodstuffs stores have held price increases to customers below inflation.
Foodstuffs NZ Managing Director, Chris Quin says the rolled back prices have outperformed all projections on the savings to customers and the quantity of the items sold.
“We estimated this initiative would save customers about $500k each week, so it’s been fantastic to see the actual savings come in at over double that.
“We’ve been watching Price Rollback closely from the start to understand if it was delivering what customers needed, and what additional action we can take to help customers facing an increasingly tough outlook for their household budgets.
“To make sure we continue to support New Zealanders through this time of record inflation across the board, we’ll continue with rolled back prices on key everyday items, and New World and Four Square stores will be launching new everyday low pricing initiatives to help New Zealanders find value, give price certainty at the checkout, and continue fighting inflation.
“When we started the Price Rollback initiative four months ago, the aim was to provide immediate relief at the checkout for customers who are struggling with the rising cost of living. In the background we’ve continued working on long-term meaningful action that will mean customers can get low prices for longer at our supermarkets – an everyday low pricing strategy on the products we know matter the most to customers.”
Simplifying pricing and promotions is one of the key commitments Foodstuffs has made to New Zealanders following the market study into the retail grocery industry.
Major factors continue to push up the cost of food in New Zealand – like fuel, fertiliser and energy prices, transport costs and the prices of global commodity ingredients like wheat, sugar, meat which are just starting to come off 30-year highs. Through the domestic supply chain, the squeeze on labour is adding to delays and costs.
Earlier this week Infometrics released the Grocery Supply Cost Index showing record increases in the cost of grocery products supplied to Foodstuffs in 2022, which are up 7.9%. These costs make up 68 cents of every retail dollar on shelf in the supermarket, putting significant pressure on the price of everyday items New Zealanders rely on in their weekly shop.
“Like any retail business, we’re focussed on buying well right now to keep costs down,” says Quin.
“We know New Zealanders are facing record household cost increases across the board, so we’re working hard to deliver value within the 19 cents of every retail dollar on the supermarket shelf we’re responsible for by finding efficiencies in our business and not adding costs.”