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

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

The August GSCI increase was unchanged from July,” said Infometrics Principal Economist Brad Olsen. “The August data continues a recent trend of a more elevated number of cost increases being recorded, but at a less intense pace than originally expected. A number of household staples have been experiencing cost increases, including meats, sauces, and toilet paper, as further fuel adjustment factors (FAFs) were implemented. Broader input cost data shows businesses were either less willing to raise costs, or unable to respond as quickly as the knock-on economic effects of the Middle East conflict emerged.”

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 August compared with the previous year. “Seafood and butchery costs remain up the most due to sustained global demand and pricing trends, with beef mince costs rising again in August,” said Mr Olsen. “Grocery department average costs rose at a faster pace in August, with costs for various sauces and canned goods lifting, alongside higher costs for toilet paper as further FAFs commenced. However, slightly lower dairy costs saw the pace of cost growth for chilled foods slow back a touch.”

Month on month, just over 5,400 products increased in cost from July to August. “The larger lift in monthly cost increases in August was due to some further FAFs commencing. At the same time, there were also a large number of cost decreases in August as earlier FAF changes ended,” said Mr Olsen. There was a notable lift in the number of increases across the grocery department in August. However, the size of most changes remained moderate overall.

“Renewed conflict in the Middle East recently continues the uncertainty around the cost outlook for the rest of 2026, with oil prices rising again and raising expectations that further cost adjustments may occur in the coming months.”

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.