‘‘Half of our customers describe their financial situation as ‘precarious’.’’

now having to be passed on to consumers.

‘‘For fruit and vegetables, they’ve got all the bad weather that’s damaged harvests, you’ve also got wage costs, production costs – diesel and that kind of thing – all the way through the supply chain ... all those costs are adding up. That’s why you’ve seen such a broad-based increase across all the different food categories.’’

He said it was hard to say when the increase would slow. ‘‘Maybe over 2023 we start to see those price rises start to slow down – touch wood if we don’t see any of the geopolitical events that we saw over 2022 that drove up prices as well. It depends on labour costs, what the weather is doing, what the domestic costs in the economy are doing.’’

Foodstuffs NZ managing director Chris Quin said people were changing the way they shopped in response to inflation. Foodstuffs operates the New World, Pak’n’Save and Four Square brands.

‘‘Half of our customers describe their financial situation as ‘precarious’. Overall, we’re seeing customers buying less, cutting out non-essential items, buying cheaper brands and shopping around to get the best deals,’’ he said.

‘‘Customers are hearing the message that 2023 may not provide relief for households as stubborn inflation continues to eat away at their weekly budget for everything, from paying the mortgage to keeping the lights on, to filling the car up and paying for groceries.

‘‘We’re heading into the busiest trading period and the big challenges facing our co-operatives in fighting inflation for our customers are still acute labour shortages and record increases in the cost of goods we buy to put on shelf.’’

He said all parts of the grocery supply chain were affected by an ‘‘extreme’’ shortage of labour.

‘‘Labour shortages are one of the key drivers of domestic cost pressures for retail groceries as there are not enough people to pick, pack and stack food for market. Getting enough staff remains tough and will put pressure on the supply chain, distribution networks and stores over the Christmas period.’’

The price of some ‘‘summer salad crops’’ was starting to fall.

‘‘Things like salad bags and lettuces, tomatoes, capsicums, avocados and telegraph cucumbers are now in season and better value for customers.’’

A Countdown spokesperson said the supermarket chain had had a record number of cost increases from suppliers in recent months.

‘‘We, and our supply partners, are trying to hold, mitigate and offset these cost increases wherever possible, but the reality is we can’t absorb all the inflation we’re seeing.’’

Chris Quin

Foodstuffs NZ managing director