Costs from grocery suppliers to supermarkets increase 2.3%pa in February

The pace of supplier cost increases to Foodstuffs supermarkets in February was in line with last month, with the Infometrics-Foodstuffs New Zealand Grocery Supplier Cost Index (GSCI) showing an average 2.3% increase in what suppliers charged in February 2026, compared to a year earlier.

“February’s increase was in line with January’s result, even with a significantly greater number of items experiencing cost increases,” said Infometrics Chief Executive and Principal Economist Brad Olsen.

“Those two trends together indicate that supplier cost pressures aren’t necessarily accelerating across the board, but that specific groups of items are facing more direct cost pressures at present.”

“Protein cost rises remain high, and there has been further pressure across fresh produce costs in recent months, despite a summer growing season that has seen good value in various crops. Some grocery items have seen larger increases, including a number of household staples.”

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 but one department in February compared with the previous year. “Annual average produce department costs rose 2.9%pa, the fastest in two years, with notable increases in cucumber and mandarin costs recently,” said Mr Olsen. “Continued strong demand for protein, relative to supply, kept butchery and seafood department costs higher, while lower dairy prices saw chilled food department cost gains ease back slightly. Grocery department costs rose 2.3%pa, with higher costs for bread, chips, chocolate, and noodles.”

Month on month, just under 3,700 products increased in cost from January to February 2026, raising the 12 month average increase to just over 3,000 items per month for the first time since mid-2024. “Although part of February’s higher number follows two lower months during the summer moratorium, the trend number of cost increases has been slowly but steadily rising, with more butchery, grocery department, and produce item increases recorded recently.”

“Along with international freight costs and logistics challenges, higher costs stemming from the Middle East conflict are hitting the economy, including production, processing and transport costs, raising concerns about further cost gains going forward,” said Mr Olsen.

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.