Fruit and vegetables drive up NZ's annual food prices

Tamaki Makaurau - Annual food prices rose 6.8 percent in February compared with February last year, Stats NZ says.

This was the largest annual increase since July 2011 when prices increased 7.9 percent.

In February 2022 compared with February 2021:

• fruit and vegetable prices increased by 17 percent

• grocery food prices increased by 5.4 percent

• restaurant meals and ready-to-eat food prices increased by 5.2 percent

• meat, poultry, and fish prices increased by 7.1 percent

• non-alcoholic beverage prices increased by 2.3 percent.

Fruit and vegetables were the largest contributor to the annual movement, mainly influenced by tomatoes, broccoli, and iceberg lettuce.

Two litre bottles of standard milk, eat-in lunch meals, and one kilo blocks of mild cheese also contributed to the annual increase. These were partly offset by decreasing prices for kumara, avocado, and crackers.

After removing regular seasonal impacts, food prices rose 0.4 percent in February 2022.

Fruit and vegetables were the main contributor to the fall in February, down 0.7 percent.

This was mainly influenced by lower prices for tomatoes, apples, and potatoes. Grocery food (down 0.2 percent) and non-alcoholic beverage prices (down 0.3 percent) also contributed to the fall. Food prices fell 0.1 percent las month and after seasonal adjustment, they rose 0.4 percent.

Last month compared with January:

• fruit and vegetable prices fell 0.7 percent (up 0.6 percent after seasonal adjustment)

• meat, poultry, and fish prices rose 0.1 percent

• grocery food prices fell 0.2 percent (down 0.1 percent after seasonal adjustment)

• non-alcoholic beverage prices fell 0.3 percent

• restaurant meals and ready-to-eat food prices rose 0.3 percent

The price changes are being closely monitored by the Commerce Commission which says that competition is not working well for consumers in the retail grocery sector (supermarkets.

It recommends a suite of changes to increase competition and help improve the price, quality and range of groceries and services available to New Zealanders.

When New Zealand supermarkets are making more than double what the Commerce Commission says to be a normal rate of return on capital for grocery retailing, it’s clear there is a problem with competition that needs to be fixed. 

The price and quality of groceries have an impact on all of New Zealanders. Groceries are a major expense for households, with more than $22 billion spent at New Zealand supermarkets and grocery stores annually.