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Home / Business / Economy / Inflation

What happens when prices keep rising, but your budget does not?

RNZ
7 Sep, 2023 09:27 AM5 mins to read

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Budgeting for the weekly food shop has become a struggle, shoppers say. Photo / Sylvie Whinray

Budgeting for the weekly food shop has become a struggle, shoppers say. Photo / Sylvie Whinray

By Louise Ternouth of RNZ

It is no secret shoppers are feeling the pinch at the checkout, paying around 12 per cent more for their groceries last month compared to the same period last year.

Shoppers told RNZ budgeting for the weekly food shop has become a struggle, as the price of food continues to skyrocket.

“Pretty much everything, yeah, it’s all going up but you know, you wanna get paid more, it’s gonna cost more,” said one shopper.

“Everything - everything’s gone up a lot,” said another.

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Since May last year RNZ Checkpoint has been tracking 36 items likely to be on a family’s weekly shopping list from a Countdown and Pak’nSave in the same Auckland suburb.

RNZ’s shop in May 2022 at Pak’nSave increased 16 per cent, an extra $34 at the checkout. Countdown was even higher, increasing 22 per cent, an extra $53.

A dozen Countdown-branded barn eggs have shot up 78 per cent, from $5.50 in May to $9.80. A dozen barn eggs at Pak’nSave have increased 168 per cent, from $3.91 to $10.49.

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One woman told RNZ her family avoided buying eggs because of the price.

“(We’re) looking at like $2 an egg, [whereas] last year or the year before was, you know, a tray was $7 - now it’s like $13 to $14, I think it’s just gone up and up.”

One man was buying two dozen eggs which he said was an everyday essential for him, but he had noticed the price increase.

“Maybe 20 to 30 per cent gone up, quite a lot, yeah ... still going to buy [them].”

A 4kg box of Persil sensitive washing powder was up 54 per cent at Countdown from $22 to $34. A 44-pack of Huggies size 3 nappies for 6-11kg increased by 66 percent at Pak’nSave, from $15.49 to $25.69. At Countdown, they went from $24.50 to $28.50.

To put things into perspective, for a humble family meal of mince with frozen peas and corn from Countdown, it cost $20 in May last year - now it would cost closer to $23 dollars, a 12 per cent increase.

Shoppers were feeling the pinch.

“Poverty is just big here in Auckland,” one said. “It’s like, everyday life now. Over the years I’ve just seen it just, you know, increase with people, you know, just living day to day and it doesn’t matter what sort of job you’re in, it’s everybody.”

As for fresh fruit and vegetables, that was off the cards for some shoppers. One shopper said they had switched to frozen.

“It’s just frozen now just because it’s expensive, and I think the people that actually grow it don’t actually get the money - it’s the people selling it, so I think that’s where it hurts the most.”

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It was not all bad news. In the dairy department, cheese and milk had both finally dropped.

A 1kg block of colby cheese was just under $10 at both stores, and two litres of standard milk also dropped - by about 20 cents to $3.70.

Some shoppers said they were trying to find ways to cut costs by buying fewer items or cheaper brands, and swapping things like meat and cheese out.

‘It’s about simply just not having enough money’

Whanganui Budget Advisers manager Sandy Fage told Checkpoint there was little cash-strapped families could do in the face of ever-rising prices.

“What we’ve seen in the past is people would come to see us because they were struggling to manage their finances. But now what we’re seeing is it’s not about managing the finances. It’s about simply just not having enough money to cover the costs.

“And when it comes to food, most of the clients or people we see have already done the cutbacks, they’ve changed down to the brand products, they are not buying as much - but once you’ve done that, where do you go?”

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The answer for some was to put off paying for things for another day.

“We’re seeing people buying their meat using buy now, pay later. And you shouldn’t have to do that, you know, to feed your family - to have to buy your food essentially on credit is something that we’ve never seen before …

“And the way the buy now, pay later works is there is no interest, and it is a really good platform if you can afford to use it correctly. But unfortunately, the people we are seeing can’t. They turn to it, they use it, then they default.

“And as soon as you default, then you get charged the fees, and if you default and cannot catch up, then it gets usually passed to a debt collection company which then impacts your credit report, which then impacts your ability to access rentals and utilities. So it’s very much a slow, downward progression.”

Fage said many of the families she helps now have not done anything wrong - there just simply was not enough money to pay for the basics.

“Now we’re getting people that just say, ‘We don’t know what to do. We haven’t come to see you because we’ve been trying to be stoic and sort it out and do all the right things. But we’ve been doing all the right things and we’re still not able to manage because prices are just going up.’ ”

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