A marketing expert says there are a number of factors behind why Kiwis are feeling a pinch in their wallets when it comes to shopping for groceries during the coronavirus lockdown - and it's not simply because supermarkets are hiking prices.
The University of Auckland's Dr Bodo Lang told TVNZ1's Breakfast this morning New Zealanders are their own worst enemies when it comes to the current pricing of groceries at supermarkets.
"Supermarket profitability would have increased simply because they've sold many, many more items than they would normally sell," Dr Lang said.
"I think it's a lot harder to determine whether the prices of items have increased because of seasonal fluctuation but they certainly would have increased their profitability simply because they've sold so many items."
While Dr Lang believes it's hard to accuse supermarkets of putting prices up but there is one reason why groceries are feeling more expensive.
"The supermarkets have admitted this in that specials were discontinued," he said.
"I do think while this is a painful realisation, particularly for people on tight budgets, I do think this was probably a sensible thing to do because the last thing you would want to be seeing is to be encouraging demand.
"We all know as soon as there's a special sign, people flock to it and they buy those units. We didn't need any extra demand in the last couple of weeks, that's for sure."
With that in mind, Dr Lang says by human nature we are our own worst enemies currently.
"It's disappointing to see people have stockpiled and I think everybody is slowly coming to the realisation that actually that was completely unnecessary because as a country, we produce far more food than we can consume ourselves.
"We have created this problem ourselves a little bit."
The Government announced yesterday a new monitoring group looking at price-gouging in the nationwide lockdown had received almost 1000 complaints in the first day of it being set-up.
People complained about the price of cauliflower, hand sanitiser, bread, meat, face masks and garlic.
High prices of cauliflower was the most common complaint, with some people reporting the vegetable being sold for $13 each, but there were also complaints over bread, meat, face masks and garlic.
But Dr Lang says there may not be much that can be done with the complaints.
"I think people will become very sensitive in a time like this to price changes but the absence of specials definitely makes products more expensive," he said.
"If you have a normal shopping basket and 20 per cent of the normal products you buy are on special and suddenly they're not, on average your shopping trolley would become more expensive.
"The million dollar question is 'what do the supermarkets pay for those products?' and that's something we don't have access to but if they paid twice as much for those products coming in because they are on higher demand and they are selling it for a higher price, then they might maintain their profit margin.
"Either way, the average price of shopping trolleys will have increased."
The final factor behind the high prices is the fact New Zealand's supermarkets are in a duopoly with the large groceries stores owned by either Progressive or Foodstuffs.
"A duopoly basically means you have two large players who operate multiple brands so it seems like there is plenty of competition but behind the scenes, there's only two big retail chains.
"It's a classic from economics - if you have two large chains dominating a market, that's not the best way to keep prices low."
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