Lower food prices due to bumper crops can be seen in data showing sharp declines in the prices of many veggies in January, but freight disruptions are continuing due to geopolitical events.
Stats NZ has this week reported a 4.0%pa increase in the Food Price Index (FPI) – its official monthly measure of food price inflation in New Zealand – for January 2024.
By comparison, Foodstuffs has recorded a 3.9%pa average increase in prices at its two co-ops’ 500+ stores, for the same categories measured in the FPI basket, compared to a year ago.
Many fresh food favourites like tomatoes and avocados decreased in price, though, year-on-year – some by over 20% – which Foodstuffs’ experts put down to bumper produce supply at the right time of year.
Foodstuffs NZ’s Managing Director, Chris Quin, says the co-ops’ ongoing efforts to keep prices as low as possible for shoppers have been assisted by this year’s long, warm summer.
“There’s real benefits to shopping seasonally if you’re looking for value right now, because the prices of produce and meat fluctuate depending on the level of supply,” says Quin. “So when something’s in season and in abundance because of a bumper crop, the prices tend to be lower.”
Salad lovers spoilt for choice
While Foodstuffs’ prices for the FPI categories were up an average 3.9%pa in January, compared to a year earlier, and supplier costs for the same categories rose an average 5.8%pa, many fresh food favourites saw significant year-on-year price falls at Foodstuffs’ stores, including those shown below:
| Price declines by product, January 2024 (YoY) | ||||
| Tomatoes ↓41% | NZ Avocados ↓30% | Courgettes ↓27% | Red Capsicum ↓21% | Fresh Lettuce ↓18% |
Foodstuffs South Island’s Head of Produce, Justin Dykhoff, says greenhouse-grown veggies have been in good supply bringing value at the checkout.
“Salad lovers have been spoilt for choice this summer thanks to the warmer temperatures and more sunshine hours,” Dykhoff says. “That’s meant great growing conditions for tomatoes, lettuce, cucumbers and capsicums, resulting in fantastic supply.”
Foodstuffs North Island’s Head of Produce and Butchery, Brigit Corson, says apple-picking is underway so new season fruit is arriving at stores, relieving the tight supply.
“Pears will start to make an appearance soon too, as will locally grown melons,” Corson says. “Kumara harvest has just started as well, which has been in short supply all year after last summer’s storms, and shoppers can expect better supply to start in March.”
Foodstuffs’ data shows popular fresh meat and dairy products were also cheaper in January than a year ago, on average across the co-ops’ stores, namely: Pams 500g butter (down 18%), Pams 1kg mild cheese (down 13%), topside beef mince (down 12%) and lamb shoulder chops (down 6%).
Corson says shoppers should expect beef and lamb prices to fluctuate over the coming months.
“All the sunshine’s been making the grass grow well, so right now farmers are focused on fattening up their stock, which means customers can look forward to more plentiful supply and lower prices as we head into autumn,” she says.
Red Sea impact kicking in
The Foodstuffs co-ops have started to see some of the container delays caused by the attacks on ships in the Red Sea, however at this stage it is not expecting serious shortages as a result. Shipping companies are either going around South Africa, adding around three to four weeks to their journey, or through the Panama Canal, which is currently experiencing delays due to lower-than-usual water levels.
Chris Quin says the Foodstuffs co-ops’ commitment not to pass on extra shipping charges to shoppers still stands, and their buying teams are continuing to work hard to plug potential supply gaps of imported products.
“There’s a possibility the longer travel times out of Europe could lead to a container shortage, which may affect imports out of other markets. This is only a medium risk, however, with no impacts at this stage,” Quin says.
“The general message to shoppers is that prices can go up and down, due to factors like weather and war. These unforeseen events are challenging to anticipate and our experts are laser focussed on ensuring the essentials still get through, and that we continue to deliver value at the checkout.”
Foodstuffs analysis against Stats NZ data (May 2022 – January 2024)
HEADLINE STATS FOR JANUARY
- Stats NZ Food Price Index = up 4.0%pa in Jan 2024 (vs. 4.8%pa in Dec 2023).
- Foodstuffs NZ data on products in the same FPI categories at the two co-op’s 500+ stores
- retail prices increased 3.9%pa in Jan 2024, on average (vs. 4.3%pa in Dec 2023)
- suppliers charged 5.8%pa more in Jan 2024, on average (vs. 6.2%pa in Dec 2023).
- Infometrics-Foodstuffs NZ Grocery Supplier Cost Index (GSCI) shows the ‘list price’ cost suppliers charged the two co-ops across 60,000 goods rose 4.3%pa in Jan 2024 (vs. 4.5%pa in Dec 2023)
