Consumer NZ's latest survey shows 82% of households report their food budgets are under strain, with researchers warning loyalty programs and supermarket data practices are making the problem worse.
Eight in ten New Zealand households report their food budgets are under strain, according to Consumer NZ's latest survey, with researchers arguing that supermarket loyalty programs and data practices are compounding the pressure rather than alleviating it.
The survey found 67 percent of respondents had low confidence that government policies could help keep food affordable and accessible. More than a third said they regularly or very often stretched their food budget, and nearly half said while they had enough food, it was not the food they would prefer.
Consumer NZ has previously argued that Food price monitoring shows little sign of the major supermarket players competing aggressively on price in a way that meaningfully benefits consumers.
How households are adapting
Among those who changed grocery shopping habits in the past year, the patterns reflect real budget pressure:
- 71 percent are buying more budget or home-brand products
- 69 percent are buying fewer premium items
- 59 percent are buying more in bulk
- 30 percent are buying less fresh or whole food
Consumer NZ head of research and advocacy Gemma Rasmussen said the shift to home brands was understandable but played further into supermarket power. "They clip the ticket twice on those items. They supply them as the owner of the brand, and then they also get to be the retailer and take any markup there."
The nutritional implications were a concern, Rasmussen said. "We know that fruit and vegetables are really expensive, so they might be cutting out more of that because they're trying to have full tummies. That follows through to the health system."
Loyalty programs and data concerns
Consumer NZ has raised particular concerns about the rollout of Foodstuffs' new Club+ loyalty programme, which now requires a Club+ card to shop online at Pak'nSave.
"That means Foodstuffs will be capturing data not only on New World but Pak'nSave and Four Square now, and they use this data along with pricing analytics through a tool called Dunnhumby to understand just how aggressively they can price in certain areas," Rasmussen said.
The concern is that consolidated data allows supermarkets to identify local market conditions — understanding just how high a price can be set in a particular suburb before customers stop buying, versus where the breaking point is in lower-income areas.
Shoppers who are locked into reward systems may also be less likely to shop around, even when cheaper options are available. "Pak'nSave, whenever we do pricing analysis, is just miles cheaper but sometimes people get locked into that reward system and want those rewards," Rasmussen said.
Calls for stronger intervention
The survey found 86 percent of respondents supported an Australian-style rule allowing large supermarkets to be penalised for charging unreasonably high prices relative to supply costs and a fair profit margin.
Public confidence in government intervention remains low and has not improved since last year, Rasmussen said.
The broader picture is one of structural pressure on household food budgets, with loyalty programs and data practices adding a layer of complexity that consumer advocates argue works against the shopper.
This article is for general information only and is not personalised financial advice. Seek advice from a licensed financial adviser (registered on the FSPR) for guidance specific to your situation.