The annual inflation rate cooled to 6 per cent in the June quarter, from 6.7 per cent in the previous quarter.
This shows things are trending in the right direction, but those numbers still make things uncomfortable for both the Reserve Bank and shoppers.
The leading cause of the high rate of inflation in the latest figures was the continued rise in food prices, despite the Government recently shining a spotlight on the staggering profits made by the supermarket duopoly.
So, is there any chance of food prices dropping back to more sustainable levels in the near future?
NZ Herald Wellington business editor Jenée Tibshraeny tells The Front Page podcast this will largely depend on the products you’re buying. Fruits and vegetables, for instance, are affected by weather events; so, provided that we do have a period of less extreme weather, those prices may come down. But this won’t apply to every product on the supermarket shelves.
“Generally, prices don’t come down,” says Tibshraeny.
“The best-case scenario is that prices increase but at a slower rate. So the hope is that they start increasing at only 3 per cent a year. That would be deemed a success by the Reserve Bank. So I’m not holding my breath when it comes to food.” Tibshraeny adds that when you consider the uncertainty posed by climate change, there are other factors which could also influence the price of food in the coming years.
“The increased frequency of severe weather events and changing weather patterns will no doubt affect food supply and prices.”
The painful experience of paying for a weekly grocery shop comes at a time when the nation’s supermarkets are under increased scrutiny over the prices they charge.
In May last year, the Commerce Commission released a report into supermarkets which informed a raft of changes that have since come into effect.
Among these was the appointment of Pierre Van Heerden as the country’s first supermarket commissioner, a role designed to ensure supermarket firms are fulfilling their obligations.
- So, what power does Van Heerden have to ensure supermarkets are kept in line?
- Is the Government still intending to break up the supermarket duopoly?
- Has anything changed since the Government first released its report in May last year?
- How long will it take inflation to finally cool down?
- And could the Government open a state-owned supermarket?
Listen to the full episode of The Front Page to hear more from Tibshraeny to hear more on the high cost of eating in New Zealand.
The Front Page is a daily news podcast from the New Zealand Herald, available to listen to every weekday from 5am. It is presented by Damien Venuto, an Auckland-based journalist with a background in business reporting who joined the Herald in 2017.