Stunned to my toes by discounts
Cost of food down in February but up overall for year
Food prices barely rose over the past 12 months as Covid19 overshadowed the New Zealand economy. In fact, most of our supermarket staples fell in price across the year, with just the cost of takeaways and ready-meals pushing up average food costs, according to the latest Stats NZ Food Price Index.
Stats NZ data yesterday showed annual food prices increased 1.2 per cent to February 2021, which is the smallest annual increase since July 2019 when food prices increased 0.9 per cent.
Month-on-month prices were down 0.9 per cent, led by seasonal falls in apples and a tomato glut that has seen supermarkets engaging in a price war.
On Wednesday alone, the Hastings branch of Pak’nSave sold two tonnes of tomatoes at just 9 cents a kilo.
Yesterday, Pak’nSave Royal Oak bettered their east coast colleagues by offering Auckland shoppers tomatoes for just 8 cents a kilo.
While these specials are below cost “loss-leader” deals, Stats NZ data confirms tomato prices are at record lows. They fell 14 per cent in February, to the cheapest level in 12 years.
The glut is largely due to pandemic logistics making exporting more difficult for growers.
“Tomato prices are highly seasonal, typically falling in summer, but they reached an all-time high in August 2020,” Stats NZ consumer prices manager Katrina Dewbery said. Prices for meat, poultry and fish were also down 2.4 per cent in the past 12 months.
The biggest contributor to this decrease was chicken pieces, down 9 per cent in the past 12 months to February 2021.
The falls were offset by the rising cost of eating out, which contributed to the small rise across the 12-month period.
Prices for restaurant meals and ready-to-eat food were up 3.7 per cent.
Within this, lunch meals, consisting of cafes and restaurant lunch options, and ethnic foods, including Thai and Indian, were the main contributors.
Other foods to see big falls across the year were chocolate biscuits, down 11 per cent; beef, down 5.6 per cent; and yoghurt, down 6.5 per cent.
Annual food price inflation reached 4.4 per cent in April 2020, the largest annual rise in more than eight years, Dewbery said.
This was when New Zealand was in level 4 Covid-19 lockdown and prices rose wsharply for potatoes and fresh eggs, with high annual increases for a range of other foods, such as cheese and bread.
“Since April, the rate of annual food price inflation has slowed, but remained above 2 per cent,” Dewbery said. “Some food prices remain at high levels, but they are not increasing as
fast as they were last year during the early stage of the pandemic.”
However, it may be a case of enjoying the stability while it lasts as commodity food prices around the world have spiked in the past few months.
On international markets, global food prices, including dairy, are now at seven-year highs.
However, it can take up to six months for commodity food prices to flow through to supermarket shelves.
Increased demand — fuelled by the Covid — recovery is combing with ongoing logistical challenges (like shipping costs) to push up the price of a grain, corn, soybeans and dairy.