Summer read: The deals sound hard to resist, but are they too good to be true? Chris Schulz investigates.

First published April 13, 2022

It seemed incredible. It seemed appalling. With grocery prices across Aotearoa skyrocketing and the Commerce Commission investigating the country’s supermarket duopoly, it also seemed entirely plausible. Could you really order your groceries from Australia and get them shipped here for cheaper than it would be to buy them at your local supermarket down the road?

When a Twitter user from Otago posted a thread detailing how she’d saved 35% on her grocery bill by shopping with Amazon Australia, she sparked a flurry of horrified reactions. Some were incredulous. Others were infuriated. Her kids were impressed: “My sons, who are gamers and think I’m really uncool, tell me I was the talk of their gamer friends for a while,” she said.

Her ruse was simple. She opened up Amazon Australia and ordered pantry staples and everyday household items, including rolled oats, toothpaste, pasta, face wash and dried fruit. A few days later, she purchased the same or equivalent items from her local supermarket in Otago. With Amazon offering free shipping, she made a 35% saving by buying from Amazon over her local supermarket.

Was it true? I had to find out. I spent a recent Monday creating accounts for New World, Countdown and Pak’nSave, then logged into my old Amazon account which I last used to buy South Park DVDs. Then I furiously loaded up my carts, trying to buy exactly the same grocery items across all four online stores. It was more difficult, time-consuming and brain-numbing than it sounds.

What did I find? Plenty of problems. You can’t buy dairy products that need to be chilled, like cheese and yoghurt, from Amazon. You can’t buy fresh fruit and vegetables, like carrots or onions, either. You also can’t buy bottles of wine or beersies. In other words, Amazon is not exactly a one-stop shop for your weekly groceries. 

What the online shopping giant does let you do is stock up on pantry staples and other items in bulk, for cheap. Almost every item I examined, from pasta to tomato sauce to dental floss, was cheaper via Amazon. Some of the price differences were staggering: in New Zealand, you can’t get almond milk cheaper than $4 a litre. Via Amazon, it is $1.70. Milo, Coco Pops and Moccona instant coffee are all cheaper overseas too.

If you’re someone who regularly gets your groceries delivered, it’s an even better deal: Amazon offers free shipping on many products, while all local supermarkets charge up to $15. (A caveat: not all Amazon products qualify for free shipping, and some have minimum order restrictions. If I wanted floss at that price, I had to buy three.)

Just like supermarkets, prices online also fluctuate depending on specials. Last week, Amazon offered $6 off a 200g jar of Moccona. This week, it’s full price – which is still cheaper than here. The good news? That Twitter user was more or less correct. If you’re prepared to put the work in comparing prices, while sourcing the rest of your weekly grocery shopping closer to home, Amazon can be a bargain-hunter’s paradise.

Asked how we got here, Gemma Rasmussen says she isn’t surprised. Consumer NZ’s head of communications and campaigns says it’s simply a lack of competition, meaning supermarkets can set whatever prices they like. “New Zealanders face a distinct lack of competition in the grocery sector with just two main players,” she says. “As a result, we pay a lot more for groceries than we should.”

She’s talking about Woolworths NZ, which runs Countdown, and Foodstuffs, which operates New World and Pak’nSave – the duopoly recently investigated by the Commerce Commission, whose final report stopped short of recommending it be split up. Instead, it suggested a mandatory code of conduct, along with guidelines for suppliers, promotional pricing and loyalty schemes.

That continuing duopoly is blamed for skyrocketing food prices. Rasmussen points to a recent local poll that shows 98% of respondents are worried about the rising price of groceries. It’s no wonder, then, that customers are exploring alternative options, including shipping staples across the ditch from a company owned by a man who rode a penis rocket into space.

So why are Australia’s prices cheaper? That’s due to increased competition between a wider range of supermarket options, including a healthy number of smaller, independent outlets. “Simply put, Australians have more choice about where to shop and they enjoy lower prices than we do,” Rasmussen says. Even with the arrival of American giant Costco, and the recent addition of online retailer Supie, that’s unlikely to change soon. “We doubt New Zealanders will be seeing more affordable prices at the checkout soon.”

Despite the savings, Rasmussen isn’t convinced shopping with Amazon is the answer. She has some other suggestions. “If consumers aren’t happy with the prices that they’re paying, we’d recommend they explore alternative options where possible such as growing your own [food], vege markets, Supie, or retailers like The Warehouse who stock some food items,” she says.

There’s another factor to consider: the impact importing your own groceries could have on climate change. “We do recognise that for most people, it is really hard to avoid the major supermarkets, and this speaks to the dominance they have in the market,” she says. “While shopping across the Tasman to score better deals is appealing, it could leave shoppers vulnerable to delays, and there are environment impacts to flying all of your food in.”

The woman who sent that tweet and sparked a furore, who asked to stay anonymous, says she’s not surprised by the fuss her tweet caused. She used to write a weekly budget advice column for her local paper, and now provides the same service for friends and family on Facebook. Despite her savings, she’s not a dedicated Amazon shopper, and isn’t sure if she’ll return. 

She’s still working her way through the supplies from her last shop, the one that caused all the fuss. But she’s still snooping around, comparing savings, hoping to bank the difference. Recently, she found another Australian grocer that ships to New Zealand. She plans to compare it to Bezos’s behemoth. “Then I’ll make a decision on whether to go with Amazon again.”