Profit Margins - The inside story
14 April 2023
You may have seen a recent Newshub (TV3) story that makes a series of claims about the profit margins we make. Here’s the inside story……
We know the cost of growing, manufacturing, importing and retailing food supplies in New Zealand are under intense inflationary pressures which is why we’re focused on balancing what’s right for our suppliers, co-ops, communities and customers.
With the cost of living and putting good food on the table the number one concern for our customers right now, our teams are laser focused on delivering the very best value they can for our 3.5 million shopping visits in our stores or online every week.
How we work with suppliers was thoroughly canvassed in the Market Study and we fully support the Code of Conduct and appointment of a Grocery Commissioner. We pride ourselves on providing all our suppliers with a fair price and good value in exchange for retailing their product.
We regularly meet with our suppliers large and small and share feedback transparently, including live forums, face to face meetings and surveys.
We appreciate that everyone growing, manufacturing, and retailing food is fighting rising costs with inflation at 30-year highs. The costs of goods from suppliers are the largest cost for our business, making up 68 cents of every retail dollar on shelf.
Cost increases to us from suppliers are up over 10.4% on last year. Over 8,200 items we buy from suppliers increased in cost in February 2023. More of these increases were larger. Despite this, we’ve held price increases to our customers below the Food Price Index basket of goods since May last year.
We agree that with inflation at record levels and recession looming, value is critical for New Zealanders, our job is to buy as well as we can and run our businesses as efficiently as possible to deliver value to our customers at the checkout.