Costs from grocery suppliers to supermarkets increase 2.4%pa in November

The pace of supplier cost increases to Foodstuffs supermarkets slowed slightly last month, with the Infometrics-Foodstuffs New Zealand Grocery Supplier Cost Index (GSCI) showing an average 2.4% increase in what suppliers charged in November 2025, compared to a year earlier.

“November’s result was a touch slower than the 2.5%pa gain seen in October, but still at a faster pace than earlier in 2025 as cost pressures remain on some key products,” said Infometrics Chief Executive and Principal Economist Brad Olsen.

“A small number of key items continue to keep some upwards pressure on the Grocery Supplier Cost Index, although recent pullbacks in costs for dairy and some produce are encouraging signs for the summer. Global demand for protein remains high, and supply remains limited, which has continued to push meat costs higher. In New Zealand, beef and lamb slaughter volumes are down 4%pa over the year to September 2025, highlighting the supply pressures.”

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 November, year on year. “Higher protein costs drove butchery costs up 4.7%pa, an acceleration on last month’s gain and the fastest pace since August 2023. This result was driven by higher beef mince, steak, and lamb costs,” said Mr Olsen. “Produce cost gains slowed back to 1.8%pa, as more seasonal produce costs start to show through, with lower costs for a number of summer salad components and stone fruit. The rate of grocery department cost rises also slowed, driven by lower olive oil costs.”

Month on month, just over 3,800 products increased in cost from October to November 2025. “November’s result was in the top quarter of monthly increases since 2018, and pushed the 12-month average to nearly 3,000 product cost increases a month,” said Mr Olsen. “There were more cost increases for butchery and chilled goods than the same month last year, reinforcing sustained pressure on some department areas, although there were also more seasonal declines for produce.”

“General operating costs remain more restrained, but again with some specific core cost pressures in some areas, which are keeping more focus on operating costs.”

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.