Consumer NZ: A third of Kiwis don't trust supermarkets

Thursday, 26 May 2022

Trust in New Zealand’s supermarket industry is plummeting, with research showing almost a third of Kiwis no longer trust supermarkets.

A survey by Consumer NZ found the number of people who did not trust supermarkets had almost doubled since June last year, jumping from 17% to 32% last month.

Of the 15 industries measured, supermarkets had seen the most significant decline in trust over the last 10 months.

“It's particularly concerning that consumer trust in a sector that is essential to our wellbeing as a nation, and is virtually impossible for consumers to do without, is seeing such a marked decline,” Consumer NZ chief executive Jon Duffy​ said.

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“The Commerce Commission’s study into the grocery sector found the duopoly is consistently making profits in excess of what it should.

“Couple that with cost of living challenges, and no wonder there has been an erosion of trust in the supermarket industry.”

Duffy said although some temporary measures recently introduced to address high prices would be helpful for struggling consumers, supermarkets “shouldn’t be applauded”.

“We should be asking how a lack of competition has been allowed to create this situation in the first place.”

In its final report into the $22b groceries industry, the Commerce Commission stopped short of recommending Countdown and Foodstuffs be forced to sell parts of their businesses, despite estimating they were making about $430 million a year in excess profits.

Chairwoman Anna Rawlings​ said measures to break up the businesses would be “highly complex to develop and would be unprecedented in our view”.

The commission instead recommended smaller changes that it said would improve competition, including encouraging but not forcing Countdown and Foodstuffs to wholesale groceries to rivals.

The commission estimated Countdown and Foodstuffs’ combined profit would fall by $430m a year if they earned a 5.5% return on their capital, instead of the 12.9% annual return it said they enjoyed between 2015 and 2019.

Earlier this month, Consumer NZ launched a petition calling for an end to supermarkets’ “super profits”. So far, 74,000 signatures have been collected.

Food prices were 6.4% higher in April 2022 compared with April 2021. Consumer NZ’s research found that New Zealanders were preparing themselves to spend more on groceries and concern about the price of food had jumped significantly.

Groceries went from the eighth-biggest financial concern in June 2021 to third in April 2022, beaten only by rent and mortgage payments.