Coronavirus: Countdown says it would be unfair to offer discounts

Wednesday, 25 March 2020

If you're hoping for a pre-lockdown special on your groceries, you might be out of luck.

Supermarkets around the country have been put under pressure in recent weeks as shoppers fearing the prospect of weeks at home have stocked up pantries and even spare rooms.

Shops have sold out of everything from flour to toilet paper, hand sanitiser and paper towels.

Paymark reported that $111 million was spent on Monday alone on food and liquor purchases.

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But shoppers have pointed out a lack of the discounts and promotions that normally litter aisles.

A spokeswoman for Countdown confirmed it was not running specials for now.

Supermarkets have been put under intense pressure from households stocking up.

'We made the decision last week not to go ahead with planned promotions right now because we simply don't have the stock in store for customers and we don't want to exacerbate demand. We also want to enable our team to completely focus on serving our customers and not changing price or promotion tickets.

'It would be unfair and highly disingenuous of us to promote a special price, then limit the amount people could buy, or worse, not have it available at all. We are dealing with extraordinary and unprecedented demand, and feeding more people than we ever have in our history. If we put an item on special and it's all gone by lunchtime, that's not okay.'

She said the situation as being reviewed every day. 'Ensuring that we're providing food and other essentials to Kiwis is our absolute priority.'

She confirmed that Countdown had not increased any of its standard shelf prices and said the chain was sensitive to making sure it was delivering value for customers. 'We also have 3400 products on Great Price and none of these have changed. As with any week, customers may see produce and meat prices fluctuate due to seasonal or market demand.'

Katherine Rich, chief executive of the Food and Grocery Council said running promotions required extra staff activity in manufacturing and also further in the supply chain, such as changing prices, displays, aisle ends, store layouts and planograms.

'All resources are and must be focused on making, dispatching unpacking, stacking and keeping products on shelves. Both supermarkets have asked suppliers for no price increases, which we respect, but companies may have to have discussions if they have to continue to airfreight and buy goods or ingredients offshore which are dramatically more expensive. The entire food and grocery sector is committed to continuity as much as possible.'

Foodstuffs spokeswoman Antoinette Laird said the business was committed to delivering 'fair value everyday' for New Zealand customers and 'New Zealand's lowest food prices' at Pak'n Save.

'Covid-19 has turned everything on its head, and right now our only focus is getting the essential products on the shelf for our customers. We have no intention of increasing prices during these extraordinary times, and we are working hand in hand with our suppliers to keep key products on the shelves across New Zealand. Our suppliers are doing a phenomenal job keeping up with extreme customer demand and promotional activity on products not under pressure is continuing.

'We must stress we do still have promoted products available, it is simply that customers are buying these first and effectively leaving the more premium brands or non-promoted products on the shelf. It is very much in Kiwis' DNA to look for a deal and even though these are trying times shoppers are still keeping a keen eye out for the best price.

'If the business was running normally we would certainly be focused on working with our suppliers and store teams to drive volume and demand through additional product promotions – but clearly as we are struggling to keep up with customer demand we simply do not have capacity to focus on this type of activity.'

Bodo Lang, head of marketing at the University of Auckland's Business School, said retail prices seemed to be stable.

'I am quite certain that supermarkets are cognisant of their crucial role at the moment and would not use this difficult time to increase their profit margin on items. If there was any indication that prices were increasing unreasonably than the government would likely take action. This is something that most sectors try to avoid by self-regulating.

'Overall profit is likely to be up simply because far more items are being sold. This increase in profits is diminished somewhat by increased costs - all the staff who they have put on leave on full pay and having to hire more staff. Specials are typically used to increase demand for particular products. My sense is that supermarkets would not want to be seen to be stimulating even more demand at this point.'