We’re paying higher prices, specials are confusing and loyalty schemes aren’t delivering overly significant rewards.
Those aren’t just the musings of a frustrated supermarket shopper - but are some of the findings in the Commerce Commission’s first annual grocery report, issued on Wednesday.
Rewards schemes were only giving a return of between 0.71 percent for Flybuys and 0.75 percent for Everyday Rewards.
Between 2007 and 2019, the average weekly spend on grocery food increased 7.3 percent every three years but the latest data showed a leap of 28.9 percent.
The commission’s report said supermarkets would point to their own rising costs as the reason for price rises.
But it said margins had continued to grow - all of the major supermarkets had experienced an increase in price-cost margins, which meant that retail prices were increasing faster than the cost of the goods.
The report said supermarkets “continue to achieve higher levels of profitability than we would expect in a workably competitive market”.
It was not likely that Costco would be able to expand to the point where it could become a serious third supermarket contender, it said.
The report said the Warehouse could be an option - its network of shops meant it was in a good position to encourage shoppers to split their shopping in many cases - but it had said it had no intention of raising the capital needed to compete.
The “five things” don’t work that well as a list, but they are:
- High prices aren’t in your head
- Competition is not bringing down margins, or prices
- Other competitors aren’t finding it easy
- Innovation, but is it what we want?
- Would fines make a difference?
Yeah I didn’t include Farmers Markets in my initial summary as they’re not available everywhere and up here (HB Farmers Market) can be hit & miss on whether the value is better than other options. What you do get is the variety of produce types that just aren’t in Supermarkets - eg in tomato season one of our local growers has probably 6-10 different varieties of tomato on sale.
Essentially it all comes down to time & flexibility, for instance I know that my local greengrocers has great variety on some things, but tomatoes they pretty much only ever stock roma or the standard hot house style up until the end of summer when they’ll have canning tomatoes. But, if I had time and really wanted the variety I could go to the farmer’s market for that, though it wouldn’t be cheaper.
For me (DINK) I have the privilege of being able to prioritise buying variety when I choose to as well - which i’m well aware is not something most people can do where prioritising energy & nutrition is much more of a factor.