Kiwis pay 25% more for groceries than Australians do, Finder survey shows

Wednesday, 13 July 2022

The basket amounted to $121 in New Zealand, compared to $97 in Australia.

New Zealanders spend up to 25% more than Australians on grocery staples, analysis from comparison website Finder shows.

Finder analysed the cost of 25 items at Countdown in New Zealand and Woolworths in Australia and found a $24 difference in a typical weekly grocery haul. Countdown is owned by Woolworths.

In New Zealand dollars, the groceries amounted to $121 in New Zealand, compared to $97 in Australia, and were compared between 8am and 10am on March 31.

The exchange rate used was A$1 to NZ$1.08, on March 31.

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Some Kiwis say they're thinking more carefully about the amount of food they're wasting amid high prices. (Video first published in June 2022)

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In Australia, 10% GST is not added to most grocery staples, such as fresh fruit and vegetables, milk, bread, spices, cereal, tea and coffee.

GST on fresh food in New Zealand accounted for 66% of the price difference. However, even excluding the 15% GST on all goods and services in New Zealand, Kiwis paid 9% more for groceries, amounting to $9 , a Finder spokesperson said.

A Countdown spokesperson said New Zealand was dealing with 30-year-high inflation and high global prices for dairy products and beef, which was driving prices in the domestic market.

The Consumer Price Index for food rose 5.9% over the 12 months to December 2021, the largest annual increase since 1990.

As of February, cabbage, broccoli, tomatoes and cucumber have had the largest price increases compared to February last year..

“While it’s not great news for Kiwis, the reality is that we’re a smaller country in a challenging geographical location, which means we do pay more to get our groceries here than Australia,” the Countdown spokesperson said.

At the time of comparison, a 4 litre bottle of milk was $7.60 at Countdown, compared to $5.83 at Woolworths.

Only two items were more expensive at Woolworths. They were 170 grams of minced garlic, $4.32 at Woolworths, and $3.50 at Countdown, and 500g of beef mince, which was $8.64 at Woolworths, but $7.45 at Countdown.

The cheapest item on the list was 500g of pasta which cost $2 at Countdown and $1.35 at Woolworths.

Independent Economist Tony Alexander said as well as GST, New Zealand food prices were affected by a number of factors.

It included higher shipping costs around and into New Zealand, less competition in the grocery sector, and lower economies of scale compared to Australia, he said.

Countdown froze the price of more than 600 items for the winter, while Woolworths reduced the price of 300 essentials, including vegetables and meat, by up to 30%.

Finder personal finance expert Kylie Purcell said there were a number of ways to save at the checkout, such as buying in bulk, buying frozen, opting for home-brand products, or avoiding supermarkets for expensive items.

“If you live near a local market, try shopping just before closing time. Often you’ll find stallholders selling fruit and veggies at a fraction of the price, so they can sell their remaining stock.”