Annual food price increase biggest since 1989 - Stats NZ

Mon, Mar 13
Food price increase

Food prices saw their biggest increase over the last year since 1989, according to the latest figures from Stats NZ.

The data shows food prices were 12% higher in February 2023 than they were at the same time last year.

"In February 2023, the annual increase was due to rises across all the broad food categories Stats NZ measures," Stats NZ outlined in a media release.

Compared with February 2022:

  • Grocery food prices increased by 12%
  • Fruit and vegetables prices increased by 23%
  • Restaurant meals and ready-to-eat food prices increased by 8.4%
  • Meat, poultry and fish prices increased by 9.8%
  • Non-alcoholic beverage prices increased by 9.1%

"Increasing prices for barn or cage-raised eggs, potato chips, and cheddar cheese were the largest drivers within grocery food," consumer prices manager James Mitchell said.

Stats NZ said that the second-largest contributor to the annual movement was fruit and vegetables.

"The increases were seen in tomatoes (117% increase) and in potatoes (48% increase)."

The data agency added adverse weather events in January and February this year hampered Food Price Index data collection.

"For any prices not collected, Stats NZ has imputed these using similar prices from within the same region, which is Stats NZ's standard treatment for when prices are not available."

Rising costs to supermarkets

It comes as grocery supplier costs for supermarkets once again accelerated in February 2023, further contributing to increased prices at the till.

The Infometrics-Foodstuffs Grocery Supplier Cost Index (GSCI), which tracks changes in supply costs, measured a 10.4% increase in comparison to one year ago.

The index, which utilises data across over 60,000 products, says 8200 items increased in cost in February 2023, a total four times greater than in February 2020 and the third largest since 2018.

In a statement, Infometrics chief executive Brad Olsen said the uptick had been anticipated due to annual increase patterns caused by the summer moratorium.

He added that the global food prices and domestic fuel prices remained elevated but steady, however input costs such as packaging were continuing to rise.

"Domestic inflation pressures have not eased substantially yet, and weather-related disruptions will only reinforce some of the pressures already in the system, as supply is limited," Olsen said.

Olsen cites higher prices for core business requirements for producers, such as freight, maintenance and packaging, as a primary contributor to the increased shelf prices.

"These rising cost pressures highlight the broad rises in operational costs being incurred by producers across the supply chain, which is driving further increases to supplier costs," he said.

Each month the index tracks what it costs supermarkets to buy goods to put on shelves, previous analyses indicating supplier costs are the major component of on-shelf prices, representing two-thirds of products' costs.

In January 2023, supply costs climbed 10.6% compared to a year earlier, with produce seeing a similar rise of 24%, and frozen food, seafood and butchery all climbing by over 10%.


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