The Foodstuffs grocery co-ops have recorded another month of the average retail price rise at their stores, which is lower than Stats NZ’s national average.
While Stats NZ’s latest food price inflation rate was 1.2 percent in October, year-on-year, the two co-ops recorded an average one percent increase YOY for their comparable basket of goods.
However, ongoing spikes in the price of popular imports like cocoa and olive oil have continued to put upward pressure on checkout prices.
Produce growers helped keep both inflation rates down, with Foodstuffs recording 11.4 percent deflation in the fruit and vegetable category compared to October 2023.
Since mid-2022, the co-ops have been tracking the average rate of price increases at their stores in the same categories, Stats NZ monitors and October was the eighth consecutive month. Both rates were around one percent or below.
The result followed Stats NZ's reporting last month that overall consumer inflation was just 2.2 percent in the year to September, the lowest since March 2021, before inflation took off due to COVID-19.
Foodstuffs NZ Managing Director Chris Quin said it was encouraging to see food price inflation still lower than general CPI annually, with the Foodstuffs co-ops having played an important part.
“Our fight against food price inflation at our stores has not only been helping customers with the cost of living but has also helped get overall CPI back within the one to three percent target range,” said Quin.
Key factors contributing to the Foodstuffs co-ops' average annual rise in food prices of one percent were a -11.4 percent fall in produce in that period and a -3.2 percent decrease in milk, cheese, and eggs versus a 3.6 percent increase in general grocery foods and a 6.1 percent increase in non-alcoholic beverages.
The last two categories included several items that have seen significant price spikes this year due to overseas shortages, including olive oil, which was 88 percent higher than a year ago, and beverages such as drinking chocolate, orange juice and instant coffee, which are still at or near record levels.
“Fortunately, this is balanced by our mostly domestically sourced fresh food categories, with the produce category seeing deflation, on average, compared to October last year.”
Foodstuffs NZ figures for the five foods that were down the most in October year-on-year were Orange kumara –58 percent, Crown pumpkin –52 percent, Brown onions –51 percent, Celery –38 percent and Carrots –29 percent.
Foodstuffs’ produce experts said that settled spring weather has delivered good volumes and value. Supplies of covered crops like tomatoes, cucumbers, and capsicums are starting to build, and berries and stone fruit are making an early appearance ahead of the festive season.
“The Hawke’s Bay nectarines being harvested now is the first good crop to come out of that region since Cyclone Gabrielle devastated the trees there nearly two years ago, which shows how long the impact of extreme weather can last.”
Offshore Foodstuffs freight experts added that the global supply chain remained strained, with shipping costs increasing mainly due to the ongoing Red Sea attacks. The current cost per TEU (twenty-foot container equivalent cargo unit) is up 27 percent on this time last year.
“Domestically, there are some issues around rail interruptions in the North Island over the peak trading period, impacting how and when we can move freight. Business costs such as freight account for around 15-16 cents per dollar of the retail shelf-price of goods.”
Stats NZ’s FPI rate of 1.2 percent and the Foodstuffs rate of one percent for its comparable basket are both lower than the 2.6 percent average rise in what suppliers charged the co-ops for that basket and the two percent average rise in what suppliers charged across the co-ops’ more comprehensive range of 60,000 products.
“While those amounts are all within the target range for inflation, with supplier costs accounting for 67-68 cents per dollar of the retail shelf price, even a three percent annual increase slowly adds up when applied across a household’s full weekly shop,” added Quin.
“That’s why our co-ops won’t be taking our eye off the ball regarding the inflation fight. For us, that means continuing to find value from suppliers at home and abroad and running our co-ops as efficiently as possible to pass those savings on to customers.”
