Countdown vs Foodstuffs: Whats cheaper, from where

Foodstuffs has rolled back the price of more than 100 staple grocery items, while rival supermarket operator Countdown has frozen the price of 500 essentials.

Supermarkets have been under pressure in recent weeks to ensure groceries remain accessible throughout winter as the cost of living continues to skyrocket and inflation pushes up food prices.

The Herald looked at items and prices of a range of pantry essentials, to find out what’s cheaper – from which supermarket, and where you can make the biggest savings. The items compared were typically lower value brands offered by the two big companies. Consumers should be aware that some of the items may not be available all of the time.

Last week Foodstuffs, the operator of Pak’nSave, New World and Four Square stores, committed to reducing the price of some staple groceries by an average 10 per cent until mid-August. Meanwhile, earlier in the month Countdown has vowed to keep prices stable despite any the potential for influencing factors to drive prices up further.

Most of the price reductions across Foodstuffs’ supermarkets would be across the Pams and Value ranges; on items such as meat, dairy, vegetables and personal care goods.

A loaf of value range bread at New World is $1.19, while the same item – in the same brand – is available at Pak’nSave for 4 cents less at $1.15. Meanwhile at Countdown, a comparable loaf of bread under its Essentials brand is $1.50.

As for milk, a UHT carton of milk can be picked up from New World for $1.89, and $1.69 at Pak’nSave for the Pams-branded product. A lower-priced milk is not included in Countdown’s Winter Freeze Range.

Cheese varies in price across the supermarkets: $9.99 for cheapest Pams brand at New World, $7.90 at Countdown and $9.89 at Pak’nSave.

A Countdown home-brand 100g block of salted butter is on sale for $5.80, as part of the supermarket’s Countdown’s Great Price Winter Freeze range, while a kilogram of plain flour is available for $2, and a 100g bag of white sugar is $2.90.

At Pak’nSave, a 100g block of Pams salted butter can be found for $4.95, a kilogram of Pams plain flour is $1.79 and a 100g bag of Pams white sugar is $2.45.

Meanwhile, New World is selling some of the same items at a slightly higher price: $5.39 for a block of Pams-branded butter or $5.49 for Rolling Meadow, $1.99 for a 1.5kg bag of plain flour and $2.69 for a 1.5kg bag of white sugar.

For breakfast, a dozen barn laid eggs at Countdown are available for $5.50, a 500g pack of streaky bacon is $10 and a 100-pack of tea bags are $4.20.

For tinned goods at Countdown, a tin of peaches is available $1.10 and a home brand tin of baked beans 90 cents. At Pak’nSave a tin of Heinz baked beans are $1.75, compared to Oak baked beans for $1.29.

Inflation has hit a 30-year high – now sitting at 6.9 per cent in the year to March.

Food prices have risen 7.6 per cent in the past year – the highest yearly increase since GST was lifted in 2010, surpassing the inflation rate. The highest increase to food prices in April came from fruit and vegetables, up 18 per cent.

Food prices are tipped to continue to rise through the rest of the year.

Retail analyst Chris Wilkinson said further increases to the cost of food were inevitable as the global economy and events such as lockdowns in China cause more shipping delays and the conflict between Russia and Ukraine pushing up the price of commodities such as wheat.

Food prices were also at the peril of demand and supply. “If the demand stays high and we’ve still got these [global] issues then [the trajectory is upwards]. With China having issues with shipping, that has a downstream effect on us.”

And while New Zealand produced more food than it was able to consume, the country was reliant on ingredients imported from offshore, driving up costs, along with the rising impact of seemingly ever-increasing fuel costs and overall shipping fees, Wilkinson told the Herald.

These factors were being compounded by the recent minimum wage increase, which was yet to be flow on and be realised for the cost of production, and the general cost of doing business, which too would ultimately effect the price of food, among other goods, paid at the check out, he said.

Wilkinson called the supermarkets recent moves to soften the blow of rising costs for shoppers a gamble as uncertainty across their supply chain remained uncertain for the foreseeable.

“While we have challenges with suppliers who are complaining about margins and challenges with supermarkets, we’ve also got demand by consumers to control pricing. It is a double-edged sword [for the supermarkets] to live with.”

Wilkinson said the supermarkets would have locked in contracts with their suppliers to minimise any potential financial losses as a result.

“They are doing all that they possibly can to give certainty to consumers.”

New Zealand’s $22 billion grocery market has come under scrutiny in recent months as food prices continue to rise. The Commerce Commission recently carried out a market study into the sector, looking at the failings and what could be done to increase competition and make the market more competitive.

However, while it found that competition was not working well in the sector, the regulator stopped short of a radical shake-up.

What the Government says

Last month Commerce and Consumer Affairs Minister David Clark hit out at Foodstuffs and Countdown – the two dominant players – over their role in rising food prices. He said it was time the duopoly was broken up and industry reset.

Clark called the increase in food prices “disappointing”, and that supermarkets were making profits “in excess of what is reasonable”.

It has been speculated that supermarkets in this country earn in excess of $1 million a day. Although, supermarket boss Chris Quinn has called this inaccurate.

“We’ve seen that the Food Price Index has gone ahead of general inflation. That is concerning and indicates that there’s more supermarkets could do to make fruit and vegetables, and other food, more affordable for New Zealanders,” Clark said in April.

The Government is looking at a number of options to reset the grocery sector, including through the forced divestment of supermarket options and monitoring “best price” clauses.

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