Foodstuffs chief executive says it's not growing profits through the lockdown

Monday, 30 March 2020

Shopping continues during the lockdown at Pak 'n Save stores.

Foodstuffs supermarkets were not super-profiteering during the coronavirus lockdown, Chris Quin, chief executive of Foodstuffs North Island said.

Quin said some people were accusing supermarkets of growing their profits from the huge increase in demand for groceries caused by coronavirus panic-buying.

Chris Quin, chief executive of Foodstuffs North Island said supermarkets knew they would be criticised over pricing.

But, he said: 'That's not a fact.'

'We are not going to come out of this as the super profiteers.'

* Call for pricing probe as prime minister promises supermarket briefing**

Since the lockdown began households have found their food bills rising, with Countdown having ended 'specials' discounting, and prices of high-demand items like bread, and some fruit and vegetables rising dramatically.

It's led to calls for the Government to investigate, and Prime Minister Jacinda Ardern, who had not seen any evidence of price-gouging, will brief the nation on supermarkets at 4pm.

Supermarkets had expected to be accused of price-gouging at some point, said Quin, speaking from home in an online seminar organised by the Trans-Tasman Business Circle.

People were scared and worried, he said, but Foodstuffs, which operated New World, Four Square and Pak 'n Save supermarkets, had opted not to try to change public perception by challenging media coverage.

'Don't try to fix what you can't fix,' he said.

'Lot's of people's organisations have stopped dead. There are incomes that are going to dry up. There are impacts that are scary,' he said.

'What they need from us more than ever is a reassurance we are going to look after value for them as much as we possibly can.'

Foodstuffs was focused on keeping its balance sheet strong so it could survive the crisis, Quin said, but costs had been rising.

Foodstuffs had been paying more overtime than Quin had seen since being involved with the business, and it had hired around 1000 people to cope with extra demand for groceries.

'Somewhere amongst all this the cost will become clear. We haven't thought it for a second,' he said.

The two rules from the start of the Covid-19 crisis were the safety of staff and customers, and making sure there were goods on the shelves for shoppers, he said.

'It's about doing what we need to do to get New Zealand through this,' Quin said.

He said profit was not among the current guiding principles for the business, but said: 'The public won't believe us if we stand up and say that.'

Every day he had been receiving daly 'essential items' pricing updates from stores.

'That's how I satisfy myself at a governance level that we are not doing the wrong thing,' Quin said.

He said Foodstuffs' supermarkets were running only about 2 per cent fewer specials than before the lockdown, but said supermarkets could not run specials on items they had no stock of.

He said supermarket pricing had become a political issue, and criticised media for its coverage on prices.

'The media have only got two subjects to talk about: coronavirus and supermarkets. There's nothing else in the news,' he said.

'The politicians go from relying on us to keep calm, to being able to score political good will by having a go at us, if the population wanted them to do that.'

Apart from the enormous ramp-up in demand, there were four big trends Quin was seeing.

People cooking more for themselves- including buying flour and yeast.

'If I look at our sales of flour for the last four week, a lot of people have discovered a skill they never had before,' he said.

There had been a huge spike in demand for online shopping, and Quin expected that to become a permanent change in the way Kiwis shopped.

There had also been a big spike in sales of health-boosters like vitamins.

There had also been a big spike in the sales of cleaning and disinfecting products.