Rising butter and grocery prices hit Rotorua bakery, food rescue

"Crazy" butter prices are cutting into already-slim margins and forcing price increases, a Rotorua bakery owner says. Photo / 123rf

• Butter prices have surged, impacting margins and forcing price increases at Guidough’s Bakery in Rotorua.
• Food prices rose 3.5% in the year to March, with butter up 63.6% and milk 16%.
• Love Soup Rotorua faces increased demand, with up to 400 people seeking help due to rising costs.

“Crazy” butter prices are cutting into already-slim margins and forcing price increases, a Rotorua bakery owner says.

And a food rescue service says it regularly has up to 400 people lining up for help as grocery prices keep rising.

According to Stats NZ, food prices increased 3.5% in the 12 months leading up to March, and this followed a 2.4% increase in the 12 months to February of this year.

The price increases for grocery food were due to higher milk prices, which increased by 16%, and butter, which increased by 63.6% in the 12 months to March.

Guidough’s Bakery in Rotorua makes everything from fresh bread to doughnuts, hot pies to sweet pastries, but owner Mel Bachmann has had to adapt to surging butter prices.

“We use butter for everything, all of our sweet baking, also in our savoury, and there’s no replacement,” she said.

Bachmann told the Rotorua Daily Post that butter prices were “crazy” – once $4 per block, some prices were up to $12.

“The best price we can get at the moment is about $9, but it will go up.

“We’re not going to compromise on flavour and quality, so we’re not, and we will not use substitutes because it’s going to ruin the quality.”

Guidough's on Springfield Rd. Photo / Kelly Makiha

She said the margins were a lot slimmer than people imagined.

“If we do put prices up, it’s not because we’re making a tonne of money from it, it’s just simply to cover the costs of all these crazy increases.

“Most people do understand, but there are still some that will be outraged that things have gone up and keep going up, but I don’t think that’s targeted towards us.”

Bachmann said Guidoughs had put prices up slightly to reflect higher ingredient costs.

“It’s hard for everyone and people are already struggling so much with the cost of living, so we don’t want bakery food to be something that people can’t afford any more.

“We want this to be for everybody so they can have a special treat, and we’re very mindful of people’s tight budgets.”

Westpac economist Paul Clark told the NZ Herald in early May that retail prices for butter generally moved in line with export prices and it was likely prices would “ratchet higher in coming months”.

The Rotorua Daily Post looked at the cheapest options for some common grocery foods at three Rotorua supermarkets.

At the time of writing, Pak’nSave Rotorua sold a 500g of Pams Pure Butter for $8.29. The same product retailed for $8.79 at New World Westend. Woolworths Rotorua retailed a 500g Woolworths Salted Butter for $8.49.

A 2-litre Pam’s Milk from Pak’nSave Rotorua was $4.40, it was $4.48 at New World Westend and at Woolworths Rotorua, a 2-litre Woolworths standard bottle was $4.43.

The price of a standard loaf of white bread was similar across the board.

Pams Value White Toast Fresh Sliced Bread retailed for $1.39 at Pak’nSave, $1.49 at New World and Woolworths sold its Essentials Sliced Bread White for $1.49.

Pak'n Save Rotorua.

Pam’s 1kg of Edam cheese, retailing for $12.29 at Pak’nSave, was $13.29 at New World and at Woolworths, a 1kg block of Everyday cheddar cheese retailed for $12.49.

Foodstuffs, which operates Pak’nSave and New World, reported a 2.8% year-on-year rise in retail prices for goods in its food price inflation basket.

Foodstuffs said the business was “very aware” of the pressure food prices placed on households.

“We’re committed to continuing to support our customers and communities through what remains a challenging time for many.”

Woolworths New Zealand said it was working “even harder” to give customers good value and a “fantastic” shopping experience.

“Customers are facing continued cost-of-living pressures, and delivering value is a top priority of ours.”

A non-profit food rescue service was also struggling to source enough food to meet demand.

Julie King, manager at Love Soup Rotorua, told the Rotorua Daily Post she wished it could do more, but could not provide for all because of limited resources.

“Higher food prices mean more people are turning to Love Soup for support, while at the same time it’s getting harder for us to source food,” King said.

Love Soup Rotorua Manager Julie King (left).

“We’re seeing growing demand at our community pop-ups, especially from families struggling to keep up with rising grocery costs.”

Each pop-up attracted 100 to 400 people.

King said the food items most in demand or hardest to supply were meat and non-perishables.

“We have a walk-in freezer, but it’s full of frozen bread and vegetables; we’re blessed to have those.

“We’re having to do more with less, but we’re committed to making sure no good food goes to waste and no one goes hungry.”

She said people were sharing their experiences and how they were going without.

“It’s a struggle for them and us, and it can be disheartening to see how real the struggle is out there.”

Kaitlyn Morrell is a multimedia journalist for the Bay of Plenty Times and Rotorua Daily Post. She has lived in the region for several years and studied journalism at Massey University.