Cost of living: Annual food prices rise 12.1 per cent - but has food price inflation peaked?

Food prices increased 12.1 per cent in the year to May 2023, Stats NZ said today.

But there were some signs that food price inflation may finally have peaked.

Stats NZ said food prices in May were up 0.3 per cent on April “due to rises across all the broad food categories”. The seasonally adjusted figure showed food prices were up 0.5 per cent on April.

At 0.3 per cent, the monthly increase was the lowest recorded since April 2022.

Fruit and vegetable prices saw the biggest increase in the last year, up 18.4 per cent with grocery food prices up 12.7 per cent on last May.

But on a monthly basis, fruit and vegetable prices dropped 2.9 per cent in May (down 2.5 per cent after seasonal adjustment) compared with April.

Restaurant meals and ready-to-eat food prices were up by 8.7 per cent annually; meat, poultry, and fish prices were up 11.7 per cent and non-alcoholic beverage prices rose 11.6 per cent.

Consumer prices manager James Mitchell said grocery foods drove a majority of the yearly price increase: “Increasing prices for fresh eggs, potato chips, and lollies were the largest drivers within grocery food”.

The second-largest driver of yearly food price growth was fruit and vegetables, specifically for avocados, kūmara, potatoes and tomatoes.

Today’s annual food price number follows increases of 12.5 per cent for the year to April 2023, 12.1 per cent to March and 12.0 per cent to February.

Monthly grocery food prices also fell 0.1 per cent. Meat, poultry, and fish prices were up 1.4 per cent on April, non-alcoholic beverage prices rose 4.5 per cent, while restaurant meals and ready-to-eat food prices were up 0.8 per cent.

Mitchell said non-alcoholic beverages drove price increases from April to May: “Prices for non-alcoholic beverages such as soft drinks, energy drinks, and bottled water increased 4.5 per cent in May, contributing the most to the overall monthly rise.

“Decreasing prices for fruit and vegetables such as tomatoes, mandarins, and kiwifruit mostly offset the non-alcoholic beverages movement.”