Foodstuffs data showed annual food price inflation across the comparable basket for the co-ops behind New World, PAK’nSAVE and Four Square was 1.5 percent in August, below Stats NZ’s annual food price inflation rate of 1.9 percent.
With broader Consumer Price Inflation of above 4 percent in the latest CPI, Foodstuffs NZ Managing Director Chris Quin said the August grocery numbers continue a positive recent trend of low annual monthly increases, despite increased fuel costs and supply chain pressures this year as a result of the Middle East conflict.
According to Quin, the data showed real value in a challenging environment, helping keep costs in check and deliver value for New Zealanders.
When you look at our basket, there’s a good mix of fresh produce and everyday grocery items that are cheaper than this time last year.
“Customers are seeing some good value in popular staples including lettuce, cabbage, broccoli, eggs, olive oil, pork and chicken. At the same time, prices for individual products are still shaped by growing conditions, supply and demand here and overseas," said Quin.
One product where prices were moving in the opposite direction was honey, up 25.4 percent year-on-year in August, the largest individual contributor to the 1.5 percent overall increase in the Foodstuffs FPI basket.
Quin added that honey is a good example of how food prices are largely shaped by supply costs and market dynamics, including international pricing, well before a product reaches the supermarket shelf.
“It’s been a really difficult season for our honey suppliers, with unfavourable weather reducing yields this year, compounded by a recent drop in hive numbers while demand for New Zealand honey remains strong overseas. That combination has tightened domestic supply, and that’s flowing through to prices here in New Zealand for this much-loved spread.”
Some of the biggest year-on-year price increases in August included onions (up 55.8 percent), green kiwifruit (+52.4 percent), dried apricots (+43.1 percent), kumara (+27.5 percent), potatoes (+27.4 percent), and honey (+25.4 percent).
As with recent months, some of the larger produce movements reflect seasonal supply and where prices sat a year ago. Potatoes and onions, in particular, came off unusually low levels last year, with tighter supply contributing to higher prices this season.
Products tracking lower included lettuce (down 32.1 percent), cabbage (-31.6 percent), broccoli (-28.8 percent), tomatoes (-24.1 percent), free-range eggs (-22.3 percent), standard eggs (-14.2 percent), pork leg (-12.8 percent), butter (-12.2 percent), cauliflower (-11.7 percent), olive oil (-11.5 percent) and chicken drumsticks (-5.9 percent).
Produce supply has been steady through recent weeks, with the transition into spring bringing more seasonal options into stores.
Broccoli and cauliflower are particularly good buying at the moment, and fresh asparagus is now in store ahead of the main season. Lettuce remains well priced, and crops like cucumbers and tomatoes are starting to become more available.
Fuel and international freight remain areas the co-ops have managed closely, with congestion and adverse weather continuing to affect some shipping routes, and fuel costs remaining volatile.
Quin added the co-operative model allows locally owned stores to share buying, logistics and infrastructure, giving them the scale to manage cost and supply pressures while staying focused on value for customers in their communities.
Supplier costs for products in the co-ops’ comparable FPI basket rose an average of 2.9 percent year-on-year, while the wider Infometrics Grocery Supplier Cost Index (GSCI), which tracks more than 60,000 goods stocked across Foodstuffs’ 500+ stores, rose 1.9 percent pa in August.
More local FMCG news here
