Countdown’s winter price freeze misses the mark

Countdown said on its website, “we’re committed to giving you value you can count on with Great Price for Winter, so make the most of the same low prices and our delicious range of products.”

The price freeze comes in the middle of a cost-of-living crisis where according to Statistics NZ’s Food Price Index (FPI), consumers are paying on average 12.5% more for food compared to April last year. That includes paying 22.5% more for fruits and vegetables alone.

The image advertising the price freeze on the webpage contained pictures of what most could agree were fairly standard food items: potatoes, tinned tomatoes, baked beans, milk, margarine, bacon, chicken, and beef stock. It gives the impression that the price freeze applies to more essential groceries, the things consumers need to be able to afford when winter arrives.

This isn’t the case, though it's worth noting that last year’s price freeze was explicitly advertised as applying to essentials. It landed the supermarket in hot water with the Advertising Standards Authority (ASA), which decided that including alcohol in the price freeze breached the Alcohol Advertising and Promotion Code. Countdown was banned from using the advertisement again.

What’s on the list?

The list of price-frozen products misses the mark when it comes to fruit and vegetables, featuring two packs of mushrooms ($4 for 200g) and a bag of potatoes ($10 for 4kg). At the time of writing, the only fruits to be seen were tinned tomatoes and a bag of apples ($5.50 for 1.5kg), but there were four different varieties of vitamin C supplements.

Also missing from the list are notable basics like bread, eggs and rice. The only dried pasta discounted is lasagne sheets ($2.50 for 250g). There are no price freezes for tampons or sanitary pads either.

However, shoppers will find the price freeze also applies to more non-essentials and luxury food items such as:

• six different kinds of smoked fish
• brie and camembert cheese
• two Sistema containers
• bottled water and coconut water
• frozen shrimp and prawns and
• topside grass-fed beef.

There’s also a range of double-ups or similar items on the list like:

• nine varieties of milk, not including plant-based milks
• eight cans of tinned tomatoes
• five types of margarine
• fourteen packages of nut varieties including nuts and raisins and chocolate-covered nuts
• ten types of biscuits.

Promotion as an opportunity to increase profit and market power

Almost half (123 by our count at the time of writing) of the products listed as a great price for winter are Countdown’s own brand. Consumer NZ head of research and advocacy Gemma Rasmussen said, "in these instances, the supermarket is both the supplier and the retailer, so they can retain higher profit, and it also means that increases their market power over other suppliers."

Whether the price freeze will remain good value for money winter-long will depend on price fluctuations for the same or similar products in other supermarkets. However, for consumers unable to shop elsewhere, the price freeze might see them paying more.

For example, Pak’n’save, owned by Foodstuffs, is selling Campbell’s Real Stock vegetable stock (1L) for $4.29, 51 cents cheaper than Countdown’s locked-in price.

We say

Supermarkets have the power to lower prices for New Zealanders in a meaningful way.

Instead of discounting multiples of the same or similar food items and out-of-budget smoked salmon or coconut water, we would’ve liked to see Countdown lower prices on fresh fruit and vegetables, and more essentials like bread, pasta, and rice. One has to question whether these price freezes are designed to really help shoppers, or if it's a savvy PR exercise.