When supermarkets ask customers to donate to food parcels they risk being squeezed, a marketing expert says.
New World has asked customers to purchase “food bank friendly items” or purchase a $20 pre-filled bag that can be donated to the City Mission or local food bank through the Family2family food bank.
When items are purchased from New World, the supermarket makes its normal margin on those goods. But a Foodstuffs spokesperson said people can also donate items bought elsewhere.
New World would also give its own $250,000 donation.
It said 40,000 bags had been donated as of May 5.
But some customers had raised concerns about the campaign.
“I can't help but think it's irresponsible for supermarkets to make such big profits and encourage donations to charities, instead of looking at their own prices and how much they pay their workers,” said one Mt Roskill customer.
Another customer from Christchurch questioned whether it was right for the supermarkets to make a profit from selling items in the parcels that went to charity.
Marketing expert Bodo Lang from Massey University said people may view such initiatives as unfair “and some may even see it as hypocrisy”.
“People have a deep-seated sense of what is fair and what may not be fair. And violating these perceptual boundaries is likely to tip consumer sentiment toward supermarkets further into the red.
“As consumers may see it, there are several issues with asking consumers to donate to food parcels. Firstly, asking consumers to donate is a widespread practice in many contexts in New Zealand… However, these donations are often requested by smaller organizations or non-profits. The two supermarket chains, on the other hand, are two very large organizations with tens of billions in revenue, so supermarkets asking consumers to donate food are likely to upset consumers.”
He said people would also be concerned because of questions about supermarket profitability.
He pointed to the Commerce Commission's draft report, which suggested supermarkets were making $430 million a year in “excess profits,” a claim the supermarkets dispute.
“Both chains state on their websites that they make donations to improve food affordability,” Lang said.
“Both chains claim to donate $6.1 and $7 million, for a combined amount of approximately $13 million per year. This sounds impressive. But when you put it in context, that's not the case. It's just the tip of the iceberg for profitability. amounts to approximately 3 percent of their excess profits… this discrepancy between the supermarkets' extraordinarily high profitability and their disappointing commitment to lowering food costs for those most in need will strike many consumers as deeply unfair.
“Third, asking consumers to make food donations when many households are reeling under high interest rates and in the midst of a cost-of-living crisis could upset consumers.”
He said high food prices are the second largest expense for households and one of the biggest contributors to the cost of living.
“As a result of these issues, many consumers will find it unfair for supermarkets to ask them to donate to food parcels.”
Foodstuff spokeswoman Emma Wooster said New World is the only Foodstuffs brand currently running a food bank campaign. Pak'nSave previously had a similar food bank campaign called PakcanSave for a few years.
“Again, customers were not asked to donate money, customers were invited to donate product, it didn't have to be from Pak'nSave, and they facilitated getting the donated product to the local food bank or City Mission. Pak'nSave donated $100,000 They don't plan to do another. That said, they will continue with retail initiatives like PakYourPantry.”
She said Foodstuffs also donated to city missions and food banks through its partnership with the NZ Food Network.
“There are of course also the social supermarkets where stores work together to open and support them.”