Food price data: Cost of eating out spikes but fruit, vegetables and meat still falling

The price of meat and vegetables continues to fall.

Food prices in New Zealand increased by 0.6% in the 12 months to July 2024, following a 0.3% decrease to June 2024, according to figures released by Stats NZ today.

The increase in food prices was largely driven by higher prices for restaurant meals and ready-to-eat food, which increased by 3.7% in the 12 months to July 2024.

Despite the annual increase in overall food prices, prices decreased for fruit and vegetables (down 8.5%), and meat, poultry and fish (down 1.1%).

Economists noted that the data was unlikely to trouble the Reserve Bank which yesterday cut the official cash rate on the assumption that inflation would continue to fall.

Cheaper prices for kūmara, lettuce, and potatoes drove the fall in fruit and vegetable prices.

“Kumara prices dropped to $5.72 per kilo, almost one-third of the peak price of $14.25 per kilo in January 2024,” consumer prices manager James Mitchell said.

On a monthly basis, food prices were up 0.4% in July 2024, following a 1% increase in June 2024.

Fruit and vegetables were the largest contributors to that increase, with prices up 4.5%.

“Price increases were seen from typical seasonal produce such as tomatoes, cucumbers, and apples,” Mitchell said.

After adjusting for seasonal effects, fruit and vegetable prices were up just 0.8%.

Meanwhile, Stats NZ’s Selected Price Index, which includes food, travel and accommodation pieces (45% of the full Consumer Price Index), showed petrol prices down in July.

Petrol prices fell 0.5%, while diesel prices fell 0.2% in July 2024. The Auckland regional fuel tax of 10 cents per litre plus GST was removed on June 30, 2024.

“Despite an overall decrease in petrol prices, Auckland was the only region to see lower prices in the month, while every other region in the country saw an increase,” Mitchell said.

Rental price increases continued to ease.

On an annual basis, the stock and flow measures rose 4.3% and 2.5% respectively.

The flow measure of rents captures rental price changes only for dwellings that have a new tenancy started in the reference month. It tends to be more volatile than the stock measure, which shows rental price changes across the whole rental population, including renters currently in tenancies.

While the stock measure offers a more realistic picture of what renters are paying, the flow measure offers clues to the trend for rents.

On a monthly basis, the stock measure rose just 0.2% and the flow measure showed a decrease of 0.1%.

The price of domestic air transport and international air transport fell 15.4% and 10.6% respectively on an annual basis. But there was a sharp seasonal rise, with fares for domestic and international up 6.4% and 3.4% respectively for July.

“On balance, July’s update on prices was on the soft side of expectations,” said Westpac senior economist Satish Ranchhod.

“Overall, today’s result is consistent with a continued easing in inflation in the September quarter. That drop might be occurring a bit faster than expected but will wait to see how some of those volatile prices evolve.”

Based on the Selected Price Index consumer prices were considerably weaker than expected, showing just a 0.1% rise in July, ASB economists said.

“Underlying details were generally softer than expected,” said senior economist Mark Smith.

“Today’s data suggests that a sharp deceleration in headline inflation is not outside the realms of possibility, even though we believe that annual non-tradable inflation will prove to be slower to moderate.”

Liam Dann is business editor-at-large for the New Zealand Herald. He is a senior writer and columnist, and also presents and produces videos and podcasts. He joined the Herald in 2003.