Foodstuffs working to give New Zealanders a fair deal – and the five charts that show it
It’s now over a year since the Grocery Industry Competition Act (GICA) was enacted, so we wanted to share the work we’re doing to give New Zealand a fair deal.
The two Foodstuffs co-ops’ are comprised of the country’s 500+ New World, PAK’nSAVE and Four Square stores owned by local families, and are two of the three regulated grocery retailers covered by the GICA regime.
The work we’ve done so far includes:
• More prices are staying lower longer – we’ve increased the number of products with ‘everyday low pricing’ and made our shelf labels easier to understand.
• Grocery Supply Code - all members of our Merchandising teams have received training in upholding the Code, as well as a large number of our store teams.
• Unit pricing – we’ve undertaken significant work to introduce unit pricing across our physical and online stores ahead of the respective deadlines for both.
• Wholesale supply – we’ve opened our wholesale supply to other retailers to make it easier for them to enter the market and/or grow, by letting them benefit from our efficiency and distribution capabilities.
In addition, we’ve continued to deliver for New Zealand in the following ways:
1. We’re actively fighting food price inflation
We’ve kept the average rate of retail price increases at our stores below Stats NZ’s official food price inflation rate for 24 of the past 27 months for a comparable basket of goods.
NZ now has one of the lowest rates of food price inflation in the OECD, which reflects our ongoing efforts to secure good deals and run stores efficiently.
At the same time we’ve been absorbing a higher rate of supplier cost increases, to ensure these don’t get passed on to New Zealanders at the checkout.
2. We provide a low-cost supermarket for New Zealanders
PAK’nSAVE stores’ advertised prices for the top 10 most frequently shopped items from five departments are regularly compared with a comparable Woolworths NZ store.
In the 12 weeks to 5 August 2024, the total price of the top 50 items at PAK’nSAVE on the day of comparison was always cheaper, with an average saving of around $30.
3. Profit remains a small component of our retail shelf prices
Over the past five years, both Foodstuffs co-ops’ net profit after tax of the shelf-price of retail goods sold has averaged less than four cents per dollar.
Around two-thirds of the shelf price covers the cost of buying the products. The next biggest proportions are our costs of doing business, and GST.
We think less than four cents per dollar is a fair and reasonable profit, and because we’re 100% NZ-owned, any profits not invested in value and innovation are distributed to our NZ family grocers.
4. We’re constantly investing in stores and digital solutions
Since 2021, Foodstuffs’ investments in new stores and store upgrades have totalled more than $300m in the North Island and $140m in the South Island.
No other organisations are investing so much in ‘brick and mortar’ businesses in New Zealand, particularly in the regions.
In addition, more Foodstuffs stores than ever now have online shopping options.
5. We provide meaningful work to 39,000 people across the country
Few other organisations employ so many Kiwis and so widely across the regions. We’re also major providers of apprenticeships, training 400+ new butchers and bakers every year.
Our co-ops respect and understand the ongoing scrutiny because we know we play an important role in the lives of millions of New Zealanders and are committed to being here for NZ. Our proposed merger is all about becoming more agile, efficient and competitive – which will allow us to not only help to ease the burden on New Zealanders but also contribute to a more competitive and fair grocery market.
For information on our work to give NZ a fair deal specific to Foodstuffs North Island, click here