Costs from grocery suppliers to supermarkets increase 2.2%pa in May

The pace of supplier cost increases to Foodstuffs supermarkets in May rose from the prior month, with the Infometrics-Foodstuffs New Zealand Grocery Supplier Cost Index (GSCI) showing an average 2.2% increase in what suppliers charged in May 2026, compared with a year earlier.

“The Index recorded a change in direction after half a year of slower increases,” said Infometrics Chief Executive and Principal Economist Brad Olsen. “May also saw a sharp rise in the number of products increasing in cost, as the early signs of higher input costs due to the Middle East conflict become more apparent.”

“Only a small number of increases were directly attributed to fuel adjustment factors, with a larger number expected to be recorded in June. This lag is driven by cost changes still being assessed and implemented, as well as uncertainty and margin pressure, with some businesses either trying to limit price increases or not yet decided on the magnitude of change, and shifting oil markets - with oil prices dropping back from peaks in recent weeks.”

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 May compared with the previous year. “There were notable large cost increases for frozen and chilled departments, with frozen processed chicken, butter, and milk costs all experiencing larger increases as input costs remain high,” said Mr Olsen. “The grocery and produce departments also saw larger increases, with fruit juice, potato chips, coffee, lettuce, and tomatoes having notably larger cost rises.”

Month on month, over 3,900 products increased in cost from April to May 2026, with the 12-month average rising back over 3,000 per month. “The number of increasing costs in May was the highest monthly total in a year, reflecting the first increases due to the Middle East conflict flowing through supply chains. The grocery and seafood departments saw the largest number of cost changes compared to the number of changes seen in recent months.”

“Cost increases to filter through over the coming months, although the magnitude and breadth of cost changes remains uncertain and likely to adjust.”

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.