Supermarket giant Foodstuffs is cutting prices by an average of 10 percent on more than 110 everyday items, to 2021 levels.
Photo: 123RF
It comes less than a week after its main rival, Countdown, announced a temporary price freeze on 500 items over winter.
Starting next week until mid-August, Foodstuffs will cut prices on products including meat, vegetables, dairy products such as butter and cheese, tea, coffee, sugar, flour, nappies and soap.
Foodstuffs NZ managing director Chris Quin said the move by the two co-operatives (its North Island and South Island co-ops) was in response to the challenge of rising food prices.
The company said it used data to identify everyday items that people bought most often.
"Our customers buy more than 1.3 million of these products each week, so we then looked at the 13-week average price of these items across 25 January to 25 April last year and are dropping the prices back to those levels from Monday 16 May until 14 August 2022."
Foodstuffs NZ managing director Chris Quin says the new pricing will kick in from next Monday. Photo: Supplied / Foodstuffs
But the company said it did not include seasonal fresh produce like broccoli and spinach, saying it traded "constantly to get customers the best deal on these each day".
Foodstuffs said the move was a "meaningful" way the company could help, during what it said was a challenging period of high prices.
It also comes as the government prepares to respond to recommendations in the Commerce Commission's grocery market study, with the possibility it could go beyond the recommendations.
Foodstuffs said rolling back the prices was not a marketing stunt.
"It's a real saving for our customers and a real cost to our business. As a result of this price rollback our stores will be selling some items below cost. Other promotions will continue over this time," Quin said.
"These are extraordinary times and Kiwis must be able to afford the everyday items they need in their weekly shop over the next few months."
The rollback of prices will affect its Four Square, New World and Pak'nSave stores.
It said, for example, at its New World North Island stores, a 600 gram loaf of Value brand white toast will be rolled back from $1.40 to $1.19. A 1kg block of Pams edam cheese will drop from $11.55 to $9.99 and 1kg of Value frozen mixed vegetables will go from $2.59 to $2.19.
Others products affected in the price reduction included Sealord tuna and Pams Rolled Oats.
The company said the items would be labelled in-store and online under "Rollback", with a full list available from Monday.
"Globally, food cost increases and the pace of food price inflation are at near record levels. While New Zealanders are facing rising costs across the board, the supermarket checkout is the place where all of the cost pressures are coming to a head as food producers and manufacturers are being hit with every global and domestic price hike," Quin said.
Foodstuffs said across its North Island co-op over the last four months, the average number of products with supplier price increases each month has been 3300, which was a 357 percent increase compared to the monthly average for the same period over the last three years.
Minister of Commerce and Consumer Affairs David Clark has described Foodstuffs' discount drive as a nice gesture, but said more reform was needed.
He was focused on fixing longer-term structural issues in the sector - but the action was welcome, he said.
The government is expected to announce supermarket reforms later this month.