Will supermarkets come to the party this holiday season with genuinely good prices?

Will supermarkets come to the party this holiday season with genuinely good prices?

New Zealand’s Grocery Commissioner is challenging supermarkets to step up and offer meaningful savings for Kiwi households this Christmas and New Year holiday season, to help address cost-of-living pressures.

Given large increases in food prices over the last two years – which has had a substantial impact on household living costs – Pierre van Heerden says there is a real opportunity for the major players in the $25 billion supermarket sector to “bring some Christmas cheer” to Kiwi consumers by offering genuine and meaningful savings – particularly given those players would benefit from increased consumer spend at this time of year.

Mr van Heerden says he is encouraged by some of the pricing commitments he is seeing promoted in the sector for the Christmas and holiday period but wants to see those backed up with “genuinely good prices”, particularly at times when demand will be highest.  

“We know this has been a particularly challenging year for Kiwi consumers with cost-of-living pressures, so I’m asking supermarkets to implement Everyday Low Pricing (EDLP) throughout the holiday season rather than the practice of frequently moving prices up and down – to help ensure Kiwi consumers are getting a genuinely good price when they shop for their groceries.”

Mr van Heerden is also urging supermarkets to ensure that when they do advertise specials or promotions these are accurate and not misleading.

“All retailers have obligations under the Fair Trading Act to ensure that consumers are not misled – all pricing and promotions therefore should be clear, accurate and unambiguous so that consumers can make a well-informed decision.”

Mr van Heerden says he wants supermarkets to become leaders in accurate pricing, given the positive difference this could deliver in terms of cost-of-living for all New Zealanders.

“As one of the largest sectors in New Zealand, supermarkets should lead the way with accurate pricing and value for money. This is a sector that touches every consumer in New Zealand so it’s important they get this right.”

In October this year, the Grocery Commissioner announced that one of his priorities is clear and accurate pricing, with supermarkets being the most complained-about-sector to the Commission and pricing issues being a common reason. The Commission is exploring options to get to the bottom of the pricing issues but is also calling on supermarkets to get the right processes in place now.

Unit Pricing Regulations have also come into effect as of 31 August 2023, which require certain grocery retailers to display the unit price for goods clearly and legibly. It will help Kiwi consumers make informed decisions about the price of the products they buy when grocery shopping, especially where products are sold in different sized packaging and by different brands.

While physical stores must comply by 31 August 2024, Mr van Heerden is encouraging major grocery retailers to start taking steps to consider how this will be implemented, particularly in relation to promotions.

The Grocery Industry Competition Act came into force on 10 July 2023, and gives the Commerce Commission powers to monitor and regulate the grocery sector. The new function headed by the Grocery Commissioner oversees the Grocery Supply Code, which seeks to address the imbalance in power between retailers and suppliers.

The Grocery Industry Competition Act designates Foodstuffs North Island, Foodstuffs South Island, and Woolworths New Zealand as regulated grocery retailers (RGRs). It puts requirements on them to consider requests from other retailers for wholesale supply in good faith, and to follow the Grocery Supply Code in their dealings with suppliers.
These changes are designed to bring more competition to the sector and more transparency to agreements between the RGRs and suppliers, benefiting New Zealand consumers over the long-term. This includes more convenient shopping, more choice and better prices.

There is more information about the Commission’s responsibilities in the sector here.

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