13 December 2023

Food Price Index Monthly YoY Growth %

Salad greens like lettuce and cabbage saw some of the biggest year-on-year price falls in November, while butter and lamb were also considerably better value in the build-up to Christmas.

That’s according to data from Foodstuffs NZ released today to coincide with Stats NZ’s latest Food Price Index (FPI) figure.

Foodstuffs’ data on the same food categories as the FPI basket shows retail prices at the two Foodstuffs co-ops’ 500+ stores were up 4.9% in November 2023, on average, compared to a year earlier.

That’s below Stats NZ’s FPI figure of 6.0%pa, and the 6.7%pa average increase in the list cost that suppliers charged the co-ops for the same product categories, compared to November 2022.

Foodstuffs NZ Managing Director, Chris Quin, welcomes the latest decline in Stats’ official rate of food price inflation, which is almost back to the rate in January 2022, and half what it was in June this year.

“The downward trend we’re seeing in New Zealand is happening in overseas markets too. In the UK, the latest rate is half what it was in March, yet still over ten percent,” says Quin.

“While New Zealand’s rate remains too high, many products were much better value in November than a year earlier, and certain Christmas favourites are looking good over the coming weeks.”

Salad greens and summer lamb

Foodstuffs’ biggest year-on-year price falls, on average, were in the produce department, namely cabbage (down 35%), cauliflower (down 29%), avocadoes (down 26%) and lettuce (down 24%).

Other double-digit declines compared to November 2022 included butter (down 15%) and lamb shoulder chops (down 13%). Lamb leg roasts – a Kiwi Christmas favourite – were 5.5% cheaper.

Foodstuffs’ produce experts say salad greens and sweetcorn are in good supply, and shoppers will find value in some alternatives to the usual festive favourites.

“While there was plentiful supply of berries in November, that’s now peaked,” says Quin. “So Christmas shoppers who are seeking value should be looking to cherries and nectarines.”

“Bean season is kicking off and there should be plenty of pumpkins for the roast too. Kumara is still short due to last summer’s extreme weather, but new season potatoes are well priced.”

“As for Christmas dessert, Aussie rock melons and watermelons are a great option for a fruit salad.”

Supplier cost rises easing

The role of fresh produce in wider food price growth was noted in the latest Infometrics-Foodstuffs NZ Grocery Supplier Cost Index (GSCI), which measures supplier cost increases across 60,000 products.

Infometrics said November saw an average 4.8%pa rise in the list cost that suppliers charged Foodstuffs’ stores for those 60,000 products, compared to a year earlier – down from 5.4%pa in October – with fresh vegetables staying lower but some fresh fruit costs rising.

Lower fuel prices were limiting upwards pressure from transport costs, and a higher exchange rate making the cost of importing goods relatively cheaper, Infometrics noted.

However, Quin says retailers are still facing inflationary headwinds in other areas of their business.

“We’re currently experiencing supply chain staffing shortages due to Covid, for example, and travel delays from roadworks in some regions, which are pushing up wage costs,” says Quin.

“That said, we remain very mindful of the cost-of-living challenges facing many of our customers this holiday season, and we’re doing all we can to deliver value at the checkout.”

Kiwis still budgeting for Xmas

Separate research by Foodstuffs NZ shows around half of shoppers are still cutting back on non-essential items when they shop (56%) and/or choosing cheaper brands or house-brands (48%).

The October survey of 1,500 shoppers found while 59% expected their financial circumstances to improve or stay the same in the next year (up from 50% in July) 42% thought they would spend less on Christmas food and groceries this year (compared to 32% in October last year).

“Customer insights like these are why our co-operatives are laser focussed on buying well and keeping prices as low as possible throughout summer,” says Quin.

"There’s no doubt inflation has made 2023 a challenging year for retailers and customers alike, but this month’s data is again encouraging, and we’re all hoping 2024 will provide some long overdue relief.”