Wednesday, December 6, 2023

Countdown average food prices rise 9.5% in a year

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Aus parent company says operating conditions in NZ remain challenging.
Cyclone Gabrielle has impacted supermarket supply chains.
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A combination of issues caused by Cyclone Gabrielle and ongoing supply struggles ate into Countdown’s profits from its third quarter – but sales still went up 8.5%.

In a third-quarter sales update, Australian grocery retailer Woolworths told the Australian Securities Exchange (ASX) that momentum in its New Zealand sales segment had “continued to improve”.

“However, item growth was impacted by ongoing supply chain challenges, particularly the impact of Cyclone Gabrielle,” Woolworths Group chief executive Brad Banducci said.

Total NZ food sales for the third quarter were up 8.5% to $2.01 billion, from $1.86bn in the previous quarter.

Countdown’s average food prices increased by 9.5% this quarter, compared with the year before, because of “fresh inflation reaching double digits” in the quarter – thanks to weather events and increased livestock prices. 

Countdown’s e-commerce sales declined by 8.1% during the third quarter while penetration declined to 11.5% – due to a combination of customers returning to in-store shopping, and network and capacity restrictions from the impacts of the extreme weather events.

However, on a four-year compound annual growth rate, e-commerce sales actually saw an increase of 20.2%.

One new Countdown store opened, in Timaru, and one renewal was completed, in Mairangi Bay, which Woolworths noted had been damaged by flooding. Two stores were closed in the South Island.

“Operating conditions in the country remain challenging but have stabilised following weather-related disruption early in the half,” Banducci said.

Meanwhile, a newly released study around the public’s views on the “fairest approach” to pricing goods and services amid a looming recession has revealed most New Zealanders aren’t supportive of large or multinational businesses passing on cost increases to customers in a cost-of-living crisis.

The research was done by Talbot Mills Research, commissioned by communications agency Anthem and included 1,000 respondents.

It found that 81% of respondents feel that supermarkets are charging excessively.

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