Supermarket Excess Profit Petition

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1789 posts

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#2912557 11-May-2022 09:40

johno1234:

This whole story is prime for click-baiting MSM. For example:

https://www.stuff.co.nz/business/128593392/kiwis-paying-almost-twice-as-much-as-australians-for-same-block-of-cheese

Yet when I lookup Coles vs PaknSave for 1kg block of Colby:

Coles AU$8.90 which if add GST and convert to NZ$ is $11.37. Pams 1Kg Colby at PaknSave is $11.49. Very little difference despite our smaller market size.

I see no media mention of Coles basic milk in 2L at effectively compares at $2.10/L whereas PnS is $1.95/L - not supporting the hysterical narrative.

Or premium mince, Coles effectively $26.83 vis PnS $22.99. Not mentioned.

It is all meaningless cherry picking as prices vary. If the shopper doesn't want to be wasting money they shop around - it is called a free market and the moment the government steps in and starts heaving the market it is going to get worse. State controlled supply leads to empty shelves and long queues. History always repeats itself.

Don't forget Beer - pricing for this in Aus is outright ridiculous, $34 - $40 for a doz Coronas, $50 for 2doz Heinekens etc, so we don't always have it tough

elpenguino

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#2912559 11-May-2022 09:42

sen8or:

Don't forget Beer - pricing for this in Aus is outright ridiculous, $34 - $40 for a doz Coronas, $50 for 2doz Heinekens etc, so we don't always have it tough

True and IIRC , pricing is not linear. You go in looking wanting a 6 pack, see it's $25 and end up walking out with 24 for $50.

Tough afternoon follows :-)

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Eva888

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#2912562 11-May-2022 09:48

For people on a high or middle income rising food prices may not be an issue and many would not even check or care about prices as they shop. It is a however a very big problem for the poorer members of society and those for example on sickness benefits etc where an increase on each item in their basket is the difference between existing or subsisting.

Not everyone has the ability or means to go online and check prices to shop accordingly. I’m thinking of those in poor areas where mum has kids, works in an unskilled low paid job and shops in her neighbourhood.

Meanwhile the count has reached 47,116 which is rather lower than I would have expected. Probably because the people most affected by high food prices may not have access to Internet or the capacity and skills required to even know such a petition exists. All of society’s voices are not equally heard.

At least the Minister has acknowledged there is a problem now it’s been brought to light.

wellygary

8315 posts

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#2912566 11-May-2022 09:52

mattwnz:

I remember UK food prices used to be quite a lot higher then NZs, now it is often the opposite.

Yeah, but a huge chunk of this will have been the currency moving,

The pound has gone from an historic ~33p to the NZD to now being pretty much stuck at around ~50p..

So comparisons have gone from 3:1 to 2:1 which is a pretty huge leap when comparing NZ prices to the UK

johno1234

2797 posts

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#2912572 11-May-2022 10:11

Eva888: For people on a high or middle income rising food prices may not be an issue and many would not even check or care about prices as they shop.

Really? I think I would be classified as a high earner, and our weekly supermarket bill gives me the willies. I'd be amazed if many wealthy people don't take a very close look at prices when shopping - simply because an attention to such details would be a factor in becoming wealthy in the first place.

Eva888: It is a however a very big problem for the poorer members of society and those for example on sickness benefits etc where an increase on each item in their basket is the difference between existing or subsisting.

Not everyone has the ability or means to go online and check prices to shop accordingly. I’m thinking of those in poor areas where mum has kids, works in an unskilled low paid job and shops in her neighbourhood.

This is a different problem. If these people are forced to, or elect to shop from neighbourhood dairies and small Four Square type markets, then they are going to be absolutely shafted at the checkout. Similar problem exists in deprived areas with people shopping from truck based mobile stores that sell cheap clothing, phones etc at insanely inflated prices.

All unrelated to the supermarket duopoly. There are variations between supermarket prices, but nothing like compared to neighbourhood stores and mobile stores.

itxtme

2102 posts

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#2912575 11-May-2022 10:27

johno1234:

This whole story is prime for click-baiting MSM. For example:

https://www.stuff.co.nz/business/128593392/kiwis-paying-almost-twice-as-much-as-australians-for-same-block-of-cheese

Yet when I lookup Coles vs PaknSave for 1kg block of Colby:

Coles AU$8.90 which if add GST and convert to NZ$ is $11.37. Pams 1Kg Colby at PaknSave is $11.49. Very little difference despite our smaller market size.

I see no media mention of Coles basic milk in 2L at effectively compares at $2.10/L whereas PnS is $1.95/L - not supporting the hysterical narrative.

Or premium mince, Coles effectively $26.83 vis PnS $22.99. Not mentioned.

It is all meaningless cherry picking as prices vary. If the shopper doesn't want to be wasting money they shop around - it is called a free market and the moment the government steps in and starts heaving the market it is going to get worse. State controlled supply leads to empty shelves and long queues. History always repeats itself.

Why are you converting currency? At that point its fake news. If you earn Australian dollars then that's what you pay in. The average wage in Australia is $89,122 vs $56,160 here. Everyday low price of Coles blue top is 2.60 - or $1.30 per 1L not sure where you are getting your prices from..

We are paying high prices for groceries, its a fact I am afraid. Its almost like you are insinuating the research being done is wrong, by doing strange things like converting currency or cherry picking items to compare. Not to mention Australia is a poorer example of competition - yet still better. When we look at indices NZ is 5th highest..

Eva888

2429 posts

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#2912592 11-May-2022 10:49

@johno1234 By 'shopping in their neighbourhood,' I was referring to supermarkets which is part of the subject matter and that many in poorer areas don’t have the luxury of shopping online or at a supermarket outside their neighbourhood and will remain an unheard voice who will not be part of this petition when they are actually the ones that most suffer.

I know a number of people who are well off and don’t care much about prices. That’s some, not all, which is what was implied in the post.

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johno1234

2797 posts

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#2912602 11-May-2022 11:13

itxtme:

johno1234:

This whole story is prime for click-baiting MSM. For example:

https://www.stuff.co.nz/business/128593392/kiwis-paying-almost-twice-as-much-as-australians-for-same-block-of-cheese

Yet when I lookup Coles vs PaknSave for 1kg block of Colby:

Coles AU$8.90 which if add GST and convert to NZ$ is $11.37. Pams 1Kg Colby at PaknSave is $11.49. Very little difference despite our smaller market size.

I see no media mention of Coles basic milk in 2L at effectively compares at $2.10/L whereas PnS is $1.95/L - not supporting the hysterical narrative.

Or premium mince, Coles effectively $26.83 vis PnS $22.99. Not mentioned.

It is all meaningless cherry picking as prices vary. If the shopper doesn't want to be wasting money they shop around - it is called a free market and the moment the government steps in and starts heaving the market it is going to get worse. State controlled supply leads to empty shelves and long queues. History always repeats itself.

Why are you converting currency? At that point its fake news. If you earn Australian dollars then that's what you pay in. The average wage in Australia is $89,122 vs $56,160 here. Everyday low price of Coles blue top is 2.60 - or $1.30 per 1L not sure where you are getting your prices from..

We are paying high prices for groceries, its a fact I am afraid. Its almost like you are insinuating the research being done is wrong, by doing strange things like converting currency or cherry picking items to compare. Not to mention Australia is a poorer example of competition - yet still better. When we look at indices NZ is 5th highest..

You can't compare prices if they are not in the same currency - this is common sense and the most basic economics. Cheese like most tradeables is a commodity so prices are internationally driven and can only be price compared in the same currency. It makes no sense whatsoever to muddy the issue with national incomes. The cost is set by global prices for commodities.

I got my prices from coles.com.au. My error on the milk example... but but this still meets my point that you can cherry pick things - be it milk, cheese, mince etc. Some are cheaper and some are more expensive.

I'm not insinuating the media "research" is wrong because cherry picking prices is not "research".

Of course we are paying high prices for groceries. So is Australia, USA and UK. I've posted the OECD Food Inflation indices earlier in this thread. It's high in both countries.

The two main reasons Australian food appears less expensive than ours are GST and economy of scale.

Kyanar

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#2912620 11-May-2022 12:15

johno1234:

It is harder for our smaller market to support multiple massive operators. 5 mil pop vs 26 mil... can't compete. Costco are brave to give it a crack - I really hope they succeed. I would just *love* it if Home Depot setup in NZ!

Costco aren’t “brave” or “giving it a crack”. They’re not a supermarket, and they don’t compete with supermarkets. They will do absolutely nothing to reduce the cost of your grocery shop, barring what you can buy in significant bulk quantities.

48 rolls of toilet paper? Two loaves of bread for $0.50 off what you can buy them for at your regular? A three litre of milk for the price of 2.5 litres? That’s what Costco gets you.

The Costco fuel station is a net positive though.

wellygary

8315 posts

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#2912624 11-May-2022 12:25

Kyanar:
johno1234:

It is harder for our smaller market to support multiple massive operators. 5 mil pop vs 26 mil... can't compete. Costco are brave to give it a crack - I really hope they succeed. I would just *love* it if Home Depot setup in NZ!

Costco aren’t “brave” or “giving it a crack”. They’re not a supermarket, and they don’t compete with supermarkets. They will do absolutely nothing to reduce the cost of your grocery shop, barring what you can buy in significant bulk quantities.

48 rolls of toilet paper? Two loaves of bread for $0.50 off what you can buy them for at your regular? A three litre of milk for the price of 2.5 litres? That’s what Costco gets you.

The Costco fuel station is a net positive though.

I could see Costco being used by dairies and superettes out West if they are cheaper than the supermarket controlled wholesalers they currently use,

But as you say, the regular supermarkets aren't likely to be worried too much...

rugrat

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#2912626 11-May-2022 12:43

djtOtago:

@Speedy885 question was more about who supplies the likes of My food bag and Hello fresh, not if they can compete on price.

They have a lot of fresh vegetables, fruit and Meat.

It will be from the same suppliers as the supermarkets, just like service stations and dairy’s etc. I suspect they’ll pay higher wholesale prices then the supermarkets.

TandG (Turners and growers I think) would be an example of one supplier for fruit and vegetables.

https://tandg.global/

It’s a NZ company with a global presence.

Eva888

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#2912627 11-May-2022 12:43

It appears Consumers petition has moved Foodstuffs into some action. They announced 110 items will be cut by 10% from Monday. It’s a start if it’s an honest cut and they don’t raise the prices of other items to compensate.

coffeebaron

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#2912636 11-May-2022 13:24

mattwnz:

Theoretically the cheaper prices come from the $1 million dollars a day that NZs have been overpaying, which is the extra margin the supermarkets are apparently making. So suppliers shouldn't lose out.

So to do the maths on that, if they cut their profit to $0, then each New Zelander would save 20c per day, or for a family of 5, $7 per weely shop?

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MikeAqua

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#2912641 11-May-2022 13:46

coffeebaron:

So to do the maths on that, if they cut their profit to $0, then each New Zelander would save 20c per day, or for a family of 5, $7 per weely shop?

Mic-drop!

Mike

mattwnz

20147 posts

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#2912644 11-May-2022 13:59

coffeebaron:
mattwnz:

Theoretically the cheaper prices come from the $1 million dollars a day that NZs have been overpaying, which is the extra margin the supermarkets are apparently making. So suppliers shouldn't lose out.

So to do the maths on that, if they cut their profit to $0, then each New Zelander would save 20c per day, or for a family of 5, $7 per weely shop?

That is excess profit, not profit. The profit is substantially more than a million dollars a day. Plus that is just what the commerce commission says, but that is the amount people are potentially overpaying each week due to not having competition.

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