17 Apr 2023

Food prices rise 12.1% in March compared to a year ago

12:42 pm on 17 April 2023
Close-up detail of a woman shopping in a supermarket

Prices were 12.1 percent higher in March compared to a year ago, Stats NZ said. Photo: 123RF

Food prices have had their their biggest annual increase in more than 30 years, driven by the cost of grocery items.

Prices were 12.1 percent higher in March compared to a year ago, Stats NZ said.

It was the biggest annual jump since 1989, when prices increased by 12.4 percent, and was slightly higher than the previous month's 12 percent annual increase.

Grocery food prices increased by 14 percent from a year ago and were the biggest contributor to the overall food price movement, driven by prices for eggs, potato chips and yoghurt.

Fruit and vegetable prices also soared, up 22 percent from a year ago - driven by tomatoes, potatoes and avocados - and were the second largest contributor to the annual food price change.

Meat, poultry and fish prices rose 7.8 percent, while restaurant and takeaway meals increased by 8.7 percent.

Non-alcoholic beverage prices increased by 8.2 percent.

Month-on-month, overall prices increased by a seasonally adjusted 0.5 percent from February, Stats NZ said.

Grocery food increased by 2.3 percent from February, but the rises were partly offset by a 1 percent fall in meat, poultry and fish.

Food prices weaker than expected

ASB senior economist Mark Smith said while the annual increase was at a more than three-decade high, the increase was weaker than expected.

"There were fewer than expected signs of an immediate cyclone-induced boost to fruit and vegetable prices, but generalised rises were evident for grocery food price rises," Smith said.

"Food prices rose 3.7 percent over Q1, contributing 0.7 percentage points to Q1 Consumer Price Index."

Food price rises remained ingrained, and consumers were cutting back where they could, Smith said.

"Conditions are in place that should see NZ food price inflation cool over 2023, but a difficult year lies ahead for NZ consumers.

"It is our hope that annual food price inflation has peaked - or is close to it - given lower global food commodity prices. However, the risk is that the current upward momentum in food prices takes longer to slow."

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