Food prices have risen at their fastest pace in 13 years, with an 8.3% annual increase recorded in August, Statistics NZ said on Tuesday.
Stats NZ’s Food Price Index data showed grocery food prices increased by 8.7% in August 2022 compared with the same month in 2021.
Monthly food prices were 1.1% higher in August 2022 compared with July 2022, with the price of fruit and vegetables bumping up the monthly numbers, with a 4.1% increase.
Stats NZ said the next largest contributor to the rising monthly price movement was grocery food, which rose 1.0%. Prices rose in particular for eggs (up 6.7%), yoghurt (up 4.7%), and chocolate biscuits (up 7.1%).
Higher prices were also seen for restaurant meals and ready-to-eat food, with a 6.5% increase recorded. Meat, poultry, and fish prices increased by 7.6% and non-alcoholic beverage prices rose by 4.1%.
Fruit and vegetable prices saw a 15% annual increase compared with August 2021.
Food prices have been rising since early 2021, but have taken off in 2022. In January this year food prices saw annual rises of 5.9%. Then February brought a 6.8% annual increase.
Heat in the kitchen
These rising food prices are generating political heat, with the Government taking aim at the supermarket duopoly, the corporate Woolworths and the co-operative Foodstuffs, through the Commerce Commission’s supermarket study.
That study found the big two were effectively competition killers, offering consumers a wide range of groceries at locations they can easily access (both in store and online), and at prices generally lower than those offered by competitors.
It also found a lack of suitable sites for store development and wholesale supply weakness would hold back any potential duopoly-slayers.
Commerce Minister David Clark has decided to appoint a grocery commissioner to regulate the industry, including potential fines for breaches of a proposed code of conduct.
Clark is also forcing the dominant players to open up wholesale operations to their rivals, and threatening the grocery commissioner will ensure prices are fair.
Foodstuffs HQ (there are separate structures for the North and South Island operations and an overarching corporate office in Auckland led by Chris Quin) has moved to head off some potential action the Government could take against it by pledging to remove covenants it had held over potential development land.
It has also joined the information war, most recently publishing its own price increase data which found that supermarkets were paying suppliers 8.7% more in August this month than the same month in 2021.
The Infometrics-Foodstuffs New Zealand Grocery Supplier Cost Index measures the change in the cost of grocery goods charged by suppliers to Foodstuffs North Island and South Island stores.
Infometrics says the index pulls data from more than 60,000 products from Foodstuffs NZ data.
The supermarket said in a press release that the largest component of shelf prices “is the cost of goods from our suppliers – 68c in every dollar”.
It said it had increased the prices of goods in the Food Price Index by 6.1%, meaning its co-operative members held prices at 2.2% less than inflation.
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