November 21st, 2024
Food prices increased by just 2.1% in the year to February 2024, marking the least significant annual rise since May 2021, Statistics New Zealand reported last week. This figure contrasts sharply with the 12.0% increase seen in the previous year to February 2023.
The big picture: This slowdown in food price inflation comes as welcome news for New Zealanders, amidst broader economic pressures. Stats NZ's consumer prices manager, Will Bell, attributed the minimal increase primarily to a significant drop in fruit and vegetable prices, down by 9.3%.
Zoom in:
Fresh produce prices plummet: Bell noted that lower prices for staples such as tomatoes, broccoli, and lettuce contributed heavily to the reduced inflation rate in the fruit and vegetable category.
Other food categories climb: Despite the drop in fresh produce costs, prices in other food segments saw increases. Notably, restaurant meals and ready-to-eat food prices surged by 6.7%, grocery food by 3.9%, non-alcoholic beverages by 4.3%, and meat, poultry, and fish marginally by 0.2%.
What they're saying:
"Going out for a meal or grabbing takeaways was more expensive in February 2024," said Bell, highlighting the mixed effects on consumers' wallets across different food categories.
Accommodation costs on the rise:
International stays more costly: There was a 24.5% increase in international accommodation prices in the year to February 2024, a significant shift from a decrease of 6.3% in the previous year. "The cost of staying at accommodation while abroad is more than 40% more expensive than five years ago," Bell remarked.
Domestic accommodation up too: Prices for domestic accommodation also rose, with a 6.1% increase in the same period.
What's happening: In a closer look at the month-to-month changes, food prices in February 2024 saw a decrease of 0.6% compared to January 2024. This reduction was driven by cheaper fruit and vegetables, including apples, kumara, and tomatoes, alongside dips in prices for boxed chocolates, yoghurt, and lamb.
This latest data release from Stats NZ sheds light on the nuanced inflation landscape in New Zealand, reflecting both the challenges and relief experienced by households in the face of fluctuating prices across different sectors.