Costs from grocery suppliers to supermarkets increase 1.9%pa in July

The pace of supplier cost increases to Foodstuffs supermarkets in July was slower than the prior month, with the Infometrics-Foodstuffs New Zealand Grocery Supplier Cost Index (GSCI) showing an average 1.9% increase in what suppliers charged in July 2026, compared with a year earlier.

“July’s result was the slowest annual increase since February 2025, driven by a number of cost decreases as some fuel adjustment factors reversed out, and as product cost increases haven’t been as intense as first feared when conflict in the Middle East sent various input costs soaring,” said Infometrics Principal Economist Brad Olsen. “Although costs for some items have eased back slightly, increases continue across some household staples including meats, some produce, and recently some non-food grocery items.”

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 July compared with the previous year. “Butchery costs rose further in July, led by increases for beef, lamb, and pork, and produce cost increases were led by onions, cucumbers, and some fruits,” said Mr Olsen. “Grocery department items including laundry products, soaps and deodorants, and some ready-to-eat meals rose in cost too. There were also some products that saw fuel adjustment factor increases reversed out, including fresh produce and pantry staples like tomato sauce.”

Month on month, just over 3,600 products increased in cost from June to July, a more usual number of monthly cost increases after the surge in June. Monthly cost increases averaged nearly 3,300 over the last year. “There continues to be a large number of grocery department cost increases, although these are of more limited magnitude,” said Mr Olsen. “Removals of some fuel adjustment factors in July also meant that there were more cost reductions than usual, with more likely in August depending on realised fuel prices.”

“Caution remains for overarching input cost pressures, given freight costs have spiked in recent months, and uncertainty over the pathway for fuel prices. But for now, business expectations remain for lower and less intense, but still broad, cost increases.”

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.