Costs from grocery suppliers to supermarkets increase 2.5%pa in October

The pace of supplier cost increases to Foodstuffs supermarkets quickened last month, with the Infometrics-Foodstuffs New Zealand Grocery Supplier Cost Index (GSCI) showing an average 2.5% increase in what suppliers charged in October 2025, compared to a year earlier.

“October’s rise was the fastest pace of supplier cost increases since mid-2024,” said Infometrics Chief Executive and Principal Economist Brad Olsen. “Material cost increases for a number of key items continue to drive an acceleration in the GSCI annual increase, with protein cost rises now a more dominant driver. Underlying costs for other items, like chocolate, are also continuing to rise. Supply constraints globally, relative to demand for these items, are pushing costs higher, which are influencing domestic cost decisions too. Supply has improved for dairy products, which has limited cost increases and seen some relief in high butter prices.”

The Infometrics-Foodstuffs New Zealand Grocery Supplier Cost Index (GSCI), commissioned by Foodstuffs New Zealand, measures the change in the list cost of grocery goods charged by suppliers to the Foodstuffs North Island and Foodstuffs South Island co-operatives. The Index utilises detailed Foodstuffs NZ data across over 60,000 products the Foodstuffs co-ops buy to stock in their 500+ stores, making it the largest dataset of its type in New Zealand, to give a real-time view on supplier cost changes.

Every month, the Index tracks what it costs supermarkets to buy the goods to put on the shelf. Previous analysis shows that supplier costs are the major component of supermarket prices, representing two-thirds of the on-shelf price.

Supplier costs rose across all departments in October, year on year. “Continued protein demand globally pushed seafood and butchery costs higher again, to the fastest annual gain in two years, led by fish, beef, and lamb,” said Mr Olsen. “Grocery cost increases were the fastest in a year too, with chocolate costs rising further. The pace of chilled food cost increases slowed to 3.3%pa, from over 4% earlier in the year, as improving dairy supply saw butter prices retreat from recent highs.”

Month on month, just over 3,200 products increased in cost from September to October 2025. “A few months of higher monthly rises have pushed the 12-month average to nearly 2,950 product cost increases a month, the highest in over a year,” said Mr Olsen. “There were higher-than-usual cost increases in the butchery and grocery food department areas, consistent with more supplier cost pressure in these two areas.”

“Although broader operating cost increases across food products and processing are generally more limited, some specific pressures, including energy costs and currency exchange rates, are still causing concerns in some areas.”

ENDS

Note:

The Infometrics-Foodstuffs New Zealand Grocery Supplier Cost Index (GSCI), commissioned by Foodstuffs New Zealand, measures the change in the list cost of grocery goods charged by suppliers to the Foodstuffs North and South Island cooperatives.

List cost refers to the cost suppliers charge retailers before trade spend is applied; trade spend being any form of discount provided by a supplier to allow their goods to be discounted.

The Index utilises detailed Foodstuffs NZ data, across over 60,000 products, analysed by independent economics consultancy Infometrics to produce the GSCI and publish it on a monthly basis. For more details see economics.infometrics.co.nz/report/grocery-supplier-cost-index.