The $1k Kiwi food cost advantage

Personal Finance

The savings from buying groceries for six weeks in New Zealand gives you a free week, compared with buying them in Australia. Your view?

25th Nov 11, 3:29pm by David Chaston

By David Chaston

Readers may recall that we survey grocery prices weekly, and that we run the same 'healthy eating' grocery list in both New Zealand and Australia.

This note updates our previous story.

We now have 23-weeks pricing history in New Zealand, and ten weeks pricing history in Australia.

The results show that the cost of our list continues to trend down in both countries.

Remember, our lists use house brands when available, and take advantage of specials when available - very much like a real shopper does (and unlike the official 'baskets' of each country's statistics departments).

In the four weeks to November 21, New Zealand costs fell 2.7% in NZ dollars; Australian costs fell 2.0% over the same period.

What is really interesting, however, is that despite the NZ currency weakening against the Australian dollar, it is still significantly better to buy this basket in New Zealand than Australia.

If you are a New Zealander, you save NZ$27.41 per week by buying in New Zealand. If you are an Australian, you save AU$20.76 by buying this list in New Zealand.

And remember, all New Zealand items attract a 15% GST whereas GST is only 10% in Australia for most items and some attract zero GST.

It is impressive that Kiwis are getting a much better deal than Aussies. A NZ$27.41 (AU$20.76) weekly advantage is not trivial - it represents a 15% better deal, every week.

In fact, if you are an Australian shopper you may be justifiably concerned at the poor deal you are getting - even though prices seem to be falling. Part of the price Australians pay is the cost of support for local farmers and local manufacturers.

On an annualised basis, Kiwis are saving NZ$1,370 per year by buying this weekly list in New Zealand.

On an annualised basis, Aussies are paying AU$1,063 per year too much by buying this weekly list in Australia.

And that is not chump-change.

We welcome your comments below. If you are not already registered, please register to comment

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.

12 Comments

by Chairman Moa | 25th Nov 11, 4:59pm 1322193572

This survey is only applicable if you are earning NZD and go groceries shopping in Australia. If someone is earning in Australia and buying in Australia, dollars vs dollars you'll find that it's generally cheaper in Australia (bulk buying perhaps).

Take butter for example; 500g block is selling at about $3 that $3 for someone working in Aus and 4 NZD for a kiwi - I haven't seen butter in NZD for $3 for ages.

by Gibber | 25th Nov 11, 5:57pm 1322197074

Yah. Agree Chairman Moa. I earn a lot more in Australian Dollars this year that I did last year in NZ dollars. And that is without factoring the exchange rate.

Going grocery shopping feels like I've moved back in time as the nominal AUD cost is much less than the nominal NZD cost

A better comparison for me would be the percentage I spend on groceries per week in AU than NZ... Net result. Much better off in AU

by Matt in Auck | 25th Nov 11, 8:04pm 1322204654

Agree, the survey is garbage. Chaston seems to be playing the good news guy foil to bernard's doom and gloom

by David B | 25th Nov 11, 5:57pm 1322197057

Please don't tell Phillus Goofus about this as he wants to take the GST off fruits and vegetables because, according to him, New Zealanders are too poor to buy groceries, but Australians can because they are rich and they have a capital gains tax!

Like most things on the Left (and that includes the mushy greens) they really don't like the facts to get in the way of a good story. So please keep this hush hush and just trot out the party line that poor New Zealanders need to have the GST taken off so they can afford to eat. If all else fails, then tell them to say it’s to encourage New Zealanders to buy healthy food so they won't get fat. But please don’t tell them that the research shows this will actually only equal an extra apple a week.

If all else fails, discredit the story altogether by picking on one single item of food that goes the other way, like pickled onions or butter, and then say the whole thing is rubbish because you can’t buy pickled onions in New Zealand for that! So that just proves the whole study is crap because they clearly aren’t shopping at the supermarket I shop at!

Ok?

by Chairman Moa | 25th Nov 11, 6:26pm 1322198765

One thing I notice in Aus is that the Aussies are very patriotic to their country.. Most will choose Australian made over anything else. Where as we kiwi will go for the cheapest first. I guess it's one way to keep their country going.

by Chris-M | 25th Nov 11, 6:48pm 1322200123

When your on the bones of your bum price is the major consideration. The fact that Australians are more patriotic in their food purchases suggests that they are in a more comfortable financial position. -More scope for the financial gnomes to grind them (Australians) down to the global common minimum level.

by Chairman Moa | 25th Nov 11, 7:29pm 1322202549

Fair comment.. Although the QLD govt is about to squeeze quite a few billions out of mining companies to put into education.

by Rob | 27th Nov 11, 1:45pm 1322354739

Yes I am glad your brought that up. That is so true. Even if a NZ company advertised themselves heavily as NZ owned, NZ buyers will still buy from whereever is the cheapest, or appears to be the cheapest. Same applies to online shopping, they would rather buy from teh US for a few bucks less, and buy from a NZ company. That is one reason why these ozzie chains do so well in NZ. They have the buying power so can sell stuff cheaper in NZ than local retailers, and they then send the profits back to Oz. I also think that is one reason why NZ businesses who expand and setup in OZ, tend to fail. Look at all the NZ companies that have failed in oz

by John B | 25th Nov 11, 8:45pm 1322207129

A truly useful exercise would be to define a grocery basket and have your diaspora correspondents (I can do Germany and France) fill it.

Then compare prices a) directly, b) factoring in PPP and c) as a proportion of average pre- and post-tax income.

What you're currently doing is suggesting a faux arbitrage.

As if it were really feasible to save money on groceries by jetting across to Sydney once in a while.

Which I can do by zipping across the border and having a 3 course prix fixe lunch for €9 (and saving 10c/litre on fuel) into the bargain.

by Gummy Bear Hero | 27th Nov 11, 7:30am 1322332213

David : You still have not addressed my complaint from the previous story , September 22 :

3 items ( dried apricots / brazil nuts / bananas ) are each 200 % costlier in Australia than in NZ ( $NZ 27 vs $NZ 9 ) . A Kiwi may spend $NZ 9 per week on these , but I doubt that an Aussie will buy them at $NZ 27 . That is 5 % of the basket total in NZ , but 15 % in Australia .

...... take those 3 items out of each basket , and the Aussies food bill drops to just 10 % of the average Aussie wage ....... and the Kiwi's food bill drops to 18 % of the average Kiwi wage .

10 % spent on food in Australia . ... 18 % spent on food in Godzone ...... and we're better off , David ?

by Gibber | 27th Nov 11, 11:37am 1322347045

Well just checked the dried apricots at aldi - 500g for $3.99 AUD. Seems reasonable to me.

SWEET VINE ® Turkish Apricots 500g ($7.98 per kg) $3.99

See http://www.smartershopping.com.au/productsearch.aspx

Seems like a good price in Aus

Aldi don't have the brazil nuts but have a bunch of other nuts at reasonable prices. For example, Almonds 750g for $9.99 ($13.32/Kg)

FORRESTERS FRESH ® Natural Almonds 750g ($13.32 per kg) $9.99

by Gummy Bear Hero | 27th Nov 11, 12:01pm 1322348473

Those prices are not included in David's idealised basket of groceries . And as I didn't see an itemised update , I calculated exactly off the September 22 prices .