Saturday, December 9, 2023

Food price hikes pile on the pressure

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The groceries leading the pack, overall prices increased 8.9% in the year to August.
Fresh eggs were among the products to record the largest hike in groceries.
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Food prices increased 8.9% in the year to August, heaping further pressure on households.

Statistics New Zealand released the latest food price figures on Wednesday.

Despite a month-on-month decline between June and July, only the third time this has happened since December 2021, prices were again up this round, rising 0.5% between July and August. Statistics NZ consumer prices manager James Mitchell said the largest group contributing to the annual increase was grocery food, which was up 10.6%.

Fresh eggs, potato chips and six-pack yoghurts were the products that recorded the largest hikes within the group.

Restaurant meals and ready-to-eat food prices were up 8.9% on the previous year. 

Mitchell said the month-on-month increase was largely driven by prices for fruit and vegetables, such as tomatoes, grapes, cucumbers and nectarines.

In his commentary on the latest food price data, Westpac senior economist Satish Ranchhod said while food price inflation has slowed, it remains painfully high for households.

Taking a broader look at price pressures, “living costs are still rising rapidly for many families across the country”, he said.

“Crucially, those increases have been heavily centred on the prices of necessities.”

The latest rent price data showed rents increased 0.4% in August compared to July. The annual increase was 4.1%.

Ranchhod said record high immigration will be putting pressure on rents. Households are also dealing with higher fuel costs, he said. 

“On top of those factors, many households are rolling on to higher mortgage rates.

“We expect these large increases in living costs will be a significant drag on household spending over the coming year.”

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