Are meal kits cheaper than the supermarket?

“I needed to make a change, that’s just way too much money,” she said.

Mandy isn’t alone in feeling the pinch at the supermarket checkout. In the past 12 months to September 2023, the cost of food has increased 8%.

Consumer’s Sentiment Tracker shows cost-of-living concerns remain New Zealanders’ top worry, with 57% concerned about day-to-day costs.

Mandy’s friend had started subscribing to a meal-kit service as a way to monitor spending and reduce waste. So, Mandy decided to give it a go, and signed up with Hello Fresh to see if she could reduce her spend at the supermarket.

We decided to do our own survey, too, to find out whether meal kits are cheaper than a supermarket shop.

What we did

We compared the cost of three meal-kit services to the cost of shopping for the same ingredients on Countdown’s website.

We calculated costs based on buying the proportional amount. Our figures also include the cost of getting the food delivered.

The supermarket is cheaper than the meal kits

For all three services, it was cheaper to buy the ingredients at Countdown.

Hello Fresh

We found the supermarket was cheaper for the two weeks we compared Hello Fresh to the supermarket shop.

At full price, the supermarket shop was nearly $60 cheaper for the first week of our trial, but that difference shrunk to $35.15 with the Hello Fresh discount.

Hello Fresh – and other meal bag providers – offer sign-up discounts, along with discounts for if you refer a friend to the service.

For the second week, the supermarket was still cheaper, but not by as much. You’d save $44.94 on the full-priced kit by going to the supermarket, but with the discounted meal kit, you’d only save $20.93.

Our volunteer family loved the food in the meal kit, especially the American-style chicken schnitzel recipe.

“It was great for getting the kids (aged 9 and 12) involved with the cooking,” said our volunteer.

But only having 80g of cheese for 12 BBQ pulled pork and slaw tacos wasn’t enough. They had to add more from their fridge.

The kit also came with carrots without any instructions for what recipe they should be added to. They put them in the corn and spinach salad to go with the saucy peri peri chicken rice bowl, but it became “boring and dry” and they ended up throwing the leftovers away.

Another niggle was the lack of eggs provided for a recipe. Although the recipe for the loaded beef burger and potato fries had eggs in it, they were considered a pantry staple. Our volunteers had to use six eggs from their cupboard because they weren’t provided with the kit.

“To me, that’s not a staple, it’s a whole box of eggs. If that many were needed, then I think they should have included them in the meal kit. If I had been paying full price for the kit, I would have been a bit miffed,” our volunteer said.

My Food Bag

Our My Food Bag family bought the My Choice Food Bag for $241.99 (including delivery) plus some meals selected from the gourmet range which bumped the cost up.

The supermarket shop came out between $56 and $60 cheaper than My Food Bag.

With a teenager and an adolescent in the house, the family found the portions big enough for them, and sometimes there were leftovers for lunch the next day.

The main bonus of getting My Food Bag was not having to think about what to have for dinner.

“As a working mum, I don’t have to think and plan the family meals … and if I try a new recipe, and one or all of the members say it’s disgusting, it doesn’t worry me because I haven’t put my emotional energy into creating something they don’t like.”

Like Hello Fresh, My Food Bag recipes draw on pantry staples like stock, olive oil and vinegars.

The recipes the family chose made me salivate as I was calculating the costs. Rosemary seared duck, Creole fish, and tarte au saumon sounded pretty good to me.

Bargain Box

The supermarket shop came out from $17 to $24.17 cheaper than Bargain Box.

If we’d chosen the regular delivery price of $14 at Countdown, rather than going for the cheaper option ($5.75 a week), we’d only have saved between $9 and $16 by going to the supermarket.

Our volunteer family used to get My Food Bag but switched to Bargain Box when the portions became too small for their family. Bargain Box portions are bigger.

“Our babysitter sometimes eats dinner with our kids so there is plenty for six people, sometimes even with leftovers,” our volunteer said.

The only bugbear the family has is the way the meat is packaged.

“We went from getting 900g in one packet, to three packets of 300g – that’s 15 plastic packets to recycle this week!”

On the plus side, they do appreciate that the recipes say which ones should be enjoyed earlier in the week.

“Things like mung beans and chicken need to be used earlier in the week or they end up going off!”

OUR RECREATION was carried out in June 2023 and based on two weeks of each meal kit. PRICE includes a Countdown delivery fee of $5.75 a week. Our volunteers were employees of Consumer NZ who were already receiving the meal kits. All food bag prices include delivery fees.

Bargain Box says it’s cheaper than Countdown

While our survey found the supermarket was cheaper for every meal-kit service, recent research by the New Zealand Institute of Economic Research (NZIER) found on average getting a Bargain Box was cheaper than a shop at Countdown and New World over an 8-week study period.

When the NZIER study looked at 11 weeks of data, Countdown was more expensive for five weeks (ranging from $9.88 to $21.04) and cheaper for six weeks (between .97c and $6.35), when compared to Bargain Box.

Most of the price difference came down to the delivery fee. Bargain Box charges $9.99 to deliver and the NZIER study priced the Countdown delivery fee at $14.

For our trial, we priced Countdown’s delivery on its “delivery saver” at $23 a month ($5.75 a week).

When compared to Pak ‘n’ Save (which doesn’t offer delivery) the supermarket was cheaper in 8 out of the 11 weeks of the study.

My Food Bag provided NZIER with the figures, and the study didn’t audit how they were gathered, or try and replicate the process.

The study also noted that seasonality and foreign exchange rates would impact prices, and that monitoring costs over a year would provide clearer evidence of price differences.

Our survey has a few caveats, too. We calculated our prices based on the portions of the ingredients in the meal kits – if you were to buy all the ingredients it would cost more at the supermarket. For example, we priced 103g of horseradish at $2.83, when to buy the whole jar would be $5.50.

In some instances, it was difficult to find the sauces and spices, so we substituted some ingredients. For example, we couldn’t find a Korean sticky chilli sauce, so we chose a Korean chilli sauce instead.

We’ve only priced for Countdown supermarket, because Pak ‘n’ Save doesn’t deliver nationwide. The franchise model of the Foodstuffs co-op can mean pricing is different store-to-store (which includes Pak ‘n’ Save and New World supermarkets).

Cost not the only consideration with meal kits

While cost is an important factor in choosing a meal kit, so is customer service.

The Commerce Commission is currently investigating whether Hello Fresh has potentially breached the Fair Trading Act.

In the past two years, the Commission has received 192 enquiries about Hello Fresh. Complainants had problems with its subscriptions, promotions, customer service, pricing, quality and refunds.

In contrast, the Commission has received 24 enquiries about meal kits from the My Food Bag brands. It’s not investigating My Food Bag.

Is Mandy saving money?

Mandy ordered Hello Fresh meals for six to cater for herself and the three blokes in her household.

“One of the biggest issues I found with meal kits in the past was the meal sizes were too small for my family. Now, Hello Fresh did a six person – perfect! I hoped it might just do four adults and some leftovers for lunch.”

The first week of her Hello Fresh kit cost $199.99 and the second $234.99. When she joined online, “we got a really good deal for the first week, we got $75 discount, $50 discount for the second week, and $15 discount for the third and fourth weeks.”

Mandy’s supermarket spend dropped to $300 for the first week she had Hello Fresh, and $350 for the second week. Yet, combined with the cost of the meal kits, her total food costs were about the same.

And rather than having leftovers for lunch, she found she was topping up the meals to satisfy the three blokes. For one meal, she cooked extra home-made chips, for another she added some tortilla wraps, even some cauliflower rice to bulk out the meals.

“The meals were delicious, there just wasn’t enough.”

Hello Fresh said it’s portion sizes are based on feedback from clients, as well as advice from dietitians.

Mandy has since cancelled her subscription and is looking for other options to get her supermarket spend down.

Meals kits can’t compete with the major supermarkets

Mark Winter is the CEO of My Food Bag, which offers four meal-kit services, including its namesake, Bargain Box, Fresh Start and Made.

The company commissioned the NZIER study to “get the message out there that Bargain Box is a great option in the market”.

Winter sees Bargain Box as an affordable option amongst inflationary pressures on food bills for New Zealanders. Not only does the service remove the need to think about and plan meals, it’s also delivered to your door, and cost effective, he said.

Yet, meal kits aren’t a complete substitute for supermarket shopping, the Commerce Commission’s market study into the retail grocery sector found. Even if you get a meal kit, you’ll need to go to the supermarket to buy other supplies for the week.

However, the main grocery retailers do see meal kits as direct competitors, especially My Food Bag because it also offers a range of groceries alongside the meal kits. Yet the Commission noted the range sold by My Food Bag is a lot smaller than the supermarket chains offer.

When we spoke to Winter, he said he’d need more scale to compete with the supermarkets.

“At 175 million turnover, we’re probably like a couple of Pak ‘n’ Saves in turnover.”

By comparison, Foodstuffs North Island’s latest annual report states revenue at nearly $4.3 billion.

The Commission noted that only a small proportion of shoppers were regular users of meal-kit services, with a lot of the uptake based on discounts, variety, choice and convenience.

The study also said people found meal kits to be more costly than a typical grocery shop and, at times, consuming to prepare.

What Consumer believes will bring about cheaper food prices is making the supermarket industry truly competitive.