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Enhancing Food Security and Physical Activity for Māori, Pacific and Low-income Peoples• promotions undertaken, and• nutrition-related activities implemented.Location and format of storeThe location and format of food stores has an impact on the cost of food. Supermarketstend to have cheaper prices and a larger variety of foods than local outlets such asdairies. Different supermarket chains also have different price structures. Thus, the typeof food store within a geographic area impacts on the cost of food to consumers. Forexample, in the UK, supermarkets have increasingly been located away from low-incomeareas, and are increasingly located in areas that require private transport to accessthem. 48 This can potentially have a negative impact on food security as transport issueshave been linked with food insecurity. 37The location of food stores has been an increasing area of research focus, and has ledto the concept of food deserts. Food deserts are geographic areas where there is limitedor no access to affordable, nutritious food. 49 While food deserts are evident in deprivedareas in the US, initial evidence would suggest they are not common in other countriesincluding New Zealand. The Neighbourhoods and Health project found that moredeprived areas actually tend to have better access to food outlets, except in rural areas50 51where more socially disadvantaged neighbourhoods had less access to food outlets.However, there could potentially be differences in types of food available and their costbetween supermarkets (classed as a healthy food outlet) in areas of greater or lesserdeprivation, although it is unclear if this is the case in New Zealand. In Australia,research has shown that food deserts are determined more by availability of transportthan the physical location of shops. 52The food industry could make a positive contribution in this area by considering thelocation and format of supermarkets and positioning budget supermarkets in moredeprived areas that lack good food retail facilities. Options for transport to stores for lowincomeand rural shoppers should also be considered. The economic feasibility ofproviding a supermarket shuttle has been investigated in California, and similarbreakeven analyses could be conducted by supermarkets in New Zealand to determinewhether such a scheme could be a useful initiative. 53Comparative differences in the cost of healthy versus unhealthy foods by area-leveldeprivation or rural/urban location have received little investigation in New Zealand. Afood supply audit in the Waikato region found that in some rural areas healthy food wasless available and/or more expensive than in a nearby rural or urban centre 54 ,suggesting these may be important considerations in New Zealand. Availability of freshproduce may also be more limited in some rural areas. 55At a more micro level, the layout within stores can influence the foods purchased. Thejob of a supermarket is to sell food, and to sell as much as possible. 56 A wealth ofconsumer research has informed store layout, product location and placement, pricesetting and product promotions. 56 The products that are seen the most sell the best. 47 Aconscious effort by supermarkets to place affordable, healthy foods in strategic positionsto encourage sales would be a simple first step. The importance of consumers actuallyseeing foods was demonstrated in an Australian study where researchers found that itwas perceived availability, rather than actual or even perceived cost that explained someof the inequality in purchase of less healthy foods in low-income households. 57111
Enhancing Food Security and Physical Activity for Māori, Pacific and Low-income PeoplesFoods sold in storesRetailers control the foods sold in supermarket stores, and thereby determine the typesand range of foods from which consumers can select. There is evidence that consumerbehaviour is affected by the foods supermarkets offer and their marketing strategies. 23An investigation in the US of the effect of private label milk on milk prices also found thatthe brands supermarkets choose to stock allows them to exert a degree of pricediscrimination. 58 As supermarkets can choose which brands they stock, they may notstock budget brands. Therefore, supermarkets can assist by ensuring they are stockinga range of affordable, healthy foods.Prices chargedPricing is one of the key strategic decisions for supermarkets. 47 Three pricing strategieshave been mentioned in the literature: everyday low costs, achieved by cutting costs inthe supply chain; a ‘high-low’ strategy with lower regular prices on key items (if this isbelow cost it is called a ‘loss leader’) and higher prices on other items; or use of pricepromotions. These strategies could be used by the food industry to favour affordablehealthy foods over less healthy foods. Currently, there are indications the reverseoccurs and that promotions favour less healthy foods. A survey of four Wellingtonsupermarkets over a four-week period found that less healthy beverages werediscounted more frequently than healthy beverages. 59A previous chapter discussed removal of GST from food (Chapter 2.1) and commentedon the importance of the price elasticities of demand for various foods. The evidence isthat demand for most food items, and for fruit and vegetables in particular, is relativelyprice inelastic. This means that price would need to decrease substantially to cause asignificant increase in consumption. Demand for other items such as meat tends to bemore price elastic, with a reduction in price tending to cause a greater increase inconsumption. One estimate of the price elasticity of demand for fruit and vegetables inNew Zealand predicts that a 10 percent reduction in price would lead to a 2.5 percentincrease in consumption. 60 Thus, theoretically it is likely that some healthy foods requirea greater level of price promotion to encourage sales than other foods. Results from theSHOP study, when publicly available, will provide further evidence regarding this anddetermine how such price subsidies translate into actual consumer purchasing. Earlyfindings from the trial suggest that a 12.5 percent reduction in price of fruit andvegetables led to a greater increase in fruit and vegetable sales than expected based onprevious price elasticity work. 61At supermarkets, it is often the relative rather than the absolute price that is important. 47Prices are compared with either external reference prices (a similar product) or internalreference prices (price of that product last week or in another store). Consumers willthen buy foods that they perceive as ‘good value’. This perception of food value canlead to greater purchasing of ‘value’ items. Providing unit pricing information onsupermarket shelf labels could influence price perceptions. Unit pricing displays the costper kilogram (or standard measure) for that food. It allows consumers to instantlycompare prices between different products and sizes in order to find the cheapestoption. While it allows consumers to compare the price of similar foods in different sizedpackages, it also shows that a small $1.80 chocolate bar actually costs $30 per kilogram,making a $2.99/kilogram bag of apples seem less expensive. 62 The recent AustralianCompetition and Consumer Commission inquiry into food prices recommended unitpricing be available at the point of sale. 63 A draft industry code to implement amandatory and nationally-consistent unit pricing scheme in Australia has been112
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