Mike Yardley is a Christchurch-based writer on current affairs and travel, who has written a column for Stuff for 15 years.
OPINION: While spending the past week in Australia, I took the opportunity to trawl the aisles of Coles, Aldi and Woolworths supermarkets, which vividly reaffirmed how much more expensive the weekly grocery shop is in New Zealand.
Across a sweep of weekly essentials and pantry staples, supermarket prices seem to average around 10-15% cheaper in Aussie supermarkets.
There are the obvious reasons that help explain away the glaring price disparities, including greater competition, economies of scale and the higher freight costs entailed in servicing a long and narrow nation like New Zealand.
READ MORE:
* Is the Countdown price freeze delivering value where customers need it?
* ‘It feels like a gesture’: Price freeze list not useful for families, experts say
* Questions over Countdown’s winter price freeze on ‘essentials’
* Is Aldi the fix for NZ’s supermarket pricing issues?
There’s also the messy bureaucratic head-swirl of how Australia selectively applies GST to food purchases.
For example, bread and bread rolls are GST-free, although those with a sweet coating, icing or filling attract GST, while breads that are glazed incongruously enjoy a GST exemption. Go the glaze.
Furthermore, whistling up a bread roll in a café or restaurant does attract GST.
But across much of the average supermarket shop, from breakfast cereals, eggs and cheese to infant formula, tomato sauce and baked beans, the GST-free regime rules the roost, helping keep grocery bills decidedly lower than in New Zealand.
Personally, I prefer the simplicity of our GST regime.
The periodic campaigns crusading for GST to be removed from “healthy food” in New Zealand, do not lay out how, where, or from whom the gaping loss in tax revenue would be recouped to fill the fiscal hole.
You will have noticed that in the heat of the election campaign, Australian Prime Minister Scott Morrison has taken a swipe at New Zealand’s raging inflation.
Martin Ollman/Getty Images
Australian PM Scott Morrison says Aussies are lucky they aren’t living in countries with raging inflation like NZ.
While conceding that many people are battling higher living costs, Morrison suggested Aussies were lucky they weren’t living in neighbouring countries like New Zealand.
The facts are on his side.
Annual food prices shot up 7.6% to March 2022, according to Statistics New Zealand.
In Australia, food price inflation for the same period measured 4.3%.
Here at home, as the cost of living crisis continues to intensify, there’s been much debate in recent days about Countdown’s “Great Price Winter Freeze” on 648 supermarket items, including “500-plus essentials.”
Friday’s press release earnestly trilled, “At Countdown we are deeply committed to making Kiwis’ lives a little better every day.”
I’m sure the price freeze on those 117 herbs and spices is just what you’ve been hanging out for.
Spencer Sonn, Countdown’s Managing Director, says the move aims to buck the current inflationary environment.
But Countdown’s big-hearted posturing is a bit rich after savaging shoppers with rampant increases in recent months – and locking them in under the guise of a price freeze.
Stuff
Annual food prices in New Zealand have shot up by 7.6% to March 2022, compared to 4.3% in Australia.
Associate Finance Minister Megan Woods has opined that Countdown “is trying to get ahead of the Government’s imminent response to the Commerce Commission recommendations on supermarket competition.”
I don’t think so.
In stark contrast to their Kiwi caper, Countdown’s Australian owners have taken a markedly different approach with their Woolworths supermarkets across the Tasman.
Four days before their big PR splash in New Zealand, Woolworths Group Australia unveiled a “winter price drop” on hundreds of its staple products as customers battle with rising costs of living.
It took effect on Wednesday and will remain in force until the end of August.
The reduced prices pledge applies to more than 300 seasonal staples including roast pork, hearty soups and cold and flu medication.
As for examples, pork leg roast has been cut from $11/kg to $9/kg while odd bunch potatoes 4kg are now $4.50, down from $5.90.
Unknown/Stuff
Managing director of Woolworths NZ, Spencer Sonn, says Countdown’s winter price freeze aims to counter inflation.
In addition to the winter-long price drops, 650 of Woolworths’ own brand products have now been included in its low-price programme, imposing a price freeze across those products.
Coles is yet to respond with a similar blitz, although they did initiate a winter price drop last year.
But the fact that Countdown’s parent company isn’t just freezing but dropping prices on hundreds of grocery items across the Tasman, lays bare what a miserly marketing gimmick they’ve cooked up here.
Foodstuffs loves to sport its patriotic stripes, so here’s looking at you, Stickman and Mr New World.
How willing are you to beat Woolworths at their own game and cut the shopper some meaningful slack?
Where’s your winter price drop?
