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

The pace of supplier cost increases to Foodstuffs supermarkets picked up slightly in August, with the Infometrics-Foodstuffs New Zealand Grocery Supplier Cost Index (GSCI) showing an average 2.3% increase in what suppliers charged in August 2025, compared to a year earlier.

“Grocery supplier cost increases on average have sped up in 2025, with August’s result continuing the incremental upward trend of recent months of slightly faster supplier cost increases,” said Infometrics Chief Executive and Principal Economist Brad Olsen. “Continued higher input costs and further increases in supplier costs across dairy and meat products are the key contributors to this trend.”

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, year on year. “Higher dairy product input costs saw overall chilled foods costs rise 3.6% and pushed bakery department costs higher, up 3.7%,” said Mr Olsen. “Butchery costs rose 2.5%pa in August, the fastest since the end of 2023, driven by further beef and lamb cost increases. Olive oil costs have eased slightly, but costs rose noticeably for cleaning and laundry products. Produce costs remain seasonal, although capsicum costs dropped slightly.”

Month on month, just over 2,500 products increased in cost from July to August 2025. “This monthly total was the smallest in six months, but comes after a number of larger results recently. The 12-month moving average remains at just over 2,800 per month,” said Mr Olsen. “Cost changes for produce and general grocery items continue to account for the majority of changes, although there was a small but significant number of butchery and chilled foods cost changes in August.”

“The GSCI represents all supplier costs, rather than just the most-purchased food items, hence the slower shift in cost trends than other metrics. However, sustained increases in a number of key products continues to put upwards pressure on the Index, driven by supply and demand dynamics globally for food and non-food items, with cleaning and laundry products, and toilet paper and paper towel products also seeing further increases recently.”

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 www.infometrics.co.nz/product/grocery-supplier-cost-index.