Food prices across New World, PAK’nSAVE and Four Square have risen by just 1.6 percent over the past year, according to new Foodstuffs figures, but a weaker New Zealand dollar, soaring fuel costs and mounting supplier pressures could spell trouble for households already struggling with the cost of living.
New data released by Foodstuffs New Zealand shows annual food price inflation across its comparable Food Price Index (FPI) basket was 1.6 percent in September, below the 2.4 percent annual food price increase recorded by Stats NZ.
The result is also considerably lower than the country’s reported annual inflation rate of 4.1 percent.
However, Foodstuffs is warning that rising costs throughout the grocery supply chain could place renewed pressure on supermarket prices in the months ahead.
Weak Dollar and Fuel Costs Put Pressure on Grocery Prices
Foodstuffs NZ Managing Director Chris Quin says the New Zealand dollar has fallen approximately 14 percent on a trade-weighted basis over the past five years, making imported food, ingredients, packaging and other products more expensive.
While a weaker dollar can benefit New Zealand exporters, it can also contribute to higher domestic prices for locally produced goods when overseas demand and export returns remain strong.
Dairy products and red meat are among the categories affected by this dynamic.
At the same time, the Asian benchmark price for refined diesel has reportedly increased by approximately 90 percent since before the Middle East conflict began.
Those increases affect almost every stage of food production and distribution, from farming and fishing to processing, packaging, international shipping and domestic transport.
Foodstuffs says higher fuel costs can affect groceries twice, first through international freight and logistics, and again when products are transported around New Zealand.
For consumers, that means even products grown or manufactured locally can become more expensive as transport and production costs increase.
Some Vegetables and Everyday Staples Much Cheaper
Despite the wider cost pressures, September delivered significant price reductions across several fresh produce categories and household staples.
A plentiful supply of cauliflower, broccoli and other vegetables has helped push retail prices down, providing some relief for supermarket shoppers.
<text weight=”medium”>Some of the biggest annual price reductions in Foodstuffs’ comparable basket were:</text>
| Product | Annual price change |
|---|---|
| Cabbage | −43.6% |
| Tomatoes | −34.6% |
| Lettuce | −31.9% |
| Cauliflower | −30.6% |
| Broccoli | −23.2% |
| Free-range eggs | −21.1% |
| Standard eggs | −13.3% |
| Butter | −12.0% |
| Olive oil | −11.7% |
The reduction in egg and butter prices will be particularly welcome for households managing tight grocery budgets.
However, lower produce prices are not necessarily good news for growers.
Foodstuffs says surplus supply has driven some vegetable prices down so sharply that growers are occasionally selling crops below their production costs.
Higher diesel and fertiliser expenses are adding to those challenges, raising questions about the longer-term sustainability of local food production.
Onions Double in Price as Potatoes, Kūmara and Fruit Climb
While some grocery items have become considerably cheaper, others have recorded substantial price increases.
Onions have experienced the largest annual increase in Foodstuffs’ comparable basket, with prices more than doubling compared with September last year.
| Product | Annual price change |
|---|---|
| Onions | +110.5% |
| Dried apricots | +47.2% |
| Potatoes | +30.4% |
| Grapes | +24.5% |
| Avocados | +20.9% |
| Honey | +20.8% |
| Kūmara | +19.4% |
Foodstuffs says some of these increases reflect unusually low prices at the same time last year, particularly for onions and potatoes.
Fruit and vegetable prices can fluctuate significantly depending on growing conditions, seasonal availability and supply.
For whānau, however, the impact is felt at the checkout, where price increases on some essential foods can offset savings made elsewhere.
Supplier Costs Rising Faster Than Supermarket Prices
Another concern is the difference between rising supplier costs and the prices paid by consumers.
Foodstuffs reports that supplier costs for products included in its comparable FPI basket increased by an average of 3.3 percent over the year to September.
That compares with the 1.6 percent increase in retail prices for the same comparable basket.
Meanwhile, the wider Infometrics Grocery Supplier Cost Index, which tracks more than 60,000 products stocked across Foodstuffs’ network of more than 500 stores, recorded an annual increase of 1.9 percent.
The figures suggest supermarket operators are facing supplier cost increases that, in some categories, are outpacing retail price movements.
However, the figures alone do not establish how much of those increases are being absorbed by supermarkets or whether they will eventually be passed on to shoppers.
Spring Produce Could Offer Some Relief
There is some positive news for consumers as warmer weather brings more seasonal produce into stores.
Asparagus and early-season strawberries are beginning to appear on supermarket shelves, with Foodstuffs expecting increasing supplies as spring progresses.
The company anticipates asparagus prices will ease as volumes increase, while the outdoor strawberry crop is expected to be plentiful.
Foodstuffs is not forecasting significant seasonal shortages and expects consumers to have a wider range of fresh produce options as the season develops.
Chicken is also being promoted as a relatively affordable protein option for households looking to manage food costs.
What Does It Mean for Māori Whānau?
For Māori whānau, particularly those managing low or fixed incomes, the latest figures present a mixed picture.
Lower prices for vegetables, eggs and butter may provide some welcome relief, but increases in potatoes, kūmara, fuel and other household essentials continue to put pressure on weekly budgets.
Importantly, a lower rate of food price inflation does not mean groceries are becoming cheaper overall.
Foodstuffs’ 1.6 percent annual increase means prices across its comparable basket are still higher than a year ago, even though the pace of increase has slowed.
The distinction matters for families who have experienced several years of rising living costs and whose incomes may not have kept pace.
Transport costs are also particularly important for rural communities, where households can face longer journeys to supermarkets and fewer opportunities to compare prices between retailers.
With the general election approaching, the affordability of food, household incomes, fuel prices and supermarket competition remain significant economic issues.
The latest Foodstuffs figures offer evidence that some grocery prices are stabilising, but they also underline the vulnerability of New Zealand’s food supply chain to international currency movements, fuel costs and seasonal production pressures.
For whānau across Aotearoa, the real test will be whether slower food price inflation translates into meaningful and sustained relief at the supermarket checkout.
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