• Stats NZ records 2.4% food price inflation (FPI) in February, year on year
• Foodstuffs co-ops report 2.5% YOY rise in retail prices for goods in their comparable basket
• Key contributors include increased offshore demand for NZ meat and dairy
• Latest FPI rates out of the US (2.6%) and UK (3.3%) suggest upward trend
Strong global demand for New Zealand’s key export commodities – dairy and meat – continues to drive food price inflation, say the Foodstuffs co-ops, with the US and UK also experiencing higher food price inflation since the start of 2025.
Stats NZ today reported a nationwide annual food price inflation (FPI) rate of 2.4% for February, while the co-ops recorded an average 2.5% year on year for their comparable FPI basket.
The Foodstuffs co-ops have been monitoring FPI across their 500+ stores – including every New World, Four Square and PAK’nSAVE – since mid-2022, measuring the prices of a basket of goods in the same categories that Stats NZ monitors, using the same methodology and weightings.
Both rates peaked in April 2023, when Stats recorded 12.5%, and the co-ops’ 10.5%. Both then bottomed out in June 2024, recording deflationary figures of -0.3% and -0.5%, respectively.
Foodstuffs NZ Managing Director Chris Quin says the latest rate for February confirms food price inflation is still within the target range of 1-3%, where it’s been for the past five months.
“At a specific product level, February’s rate was again heavily influenced by the price of olive oil, which is still almost double (87.5%) a year ago,” he says.
“At a broader category level, while February saw a year-on-year decrease for fruit and veg, that was offset by a rise for meat, poultry and fish.
“Meat prices are up due to strong global demand for New Zealand beef and lamb, which highlights the exceptional quality our farmers produce, and benefits rural communities too. What Kiwis pay at the checkout is largely driven by what the world is willing to pay, though, and with demand up and supply down, that’s significantly more than a year ago.
“At the same time, we note that food price inflation is up in two comparable markets overseas: the US has just reported 2.6% FPI in February, while the UK saw 3.3% in January – the highest either has seen in the last 12 months. So, an upward trend is noticeable after the lows seen mid-last year, but thankfully we’re still well below the highs of 2022-23.
“The big unknown right now is the looming impact of the tariff wars overseas, which could make some foods cheaper if suppliers seek alternative markets but could make some foods costlier if producers are paying more for ingredients. All we know is that some disruptions are expected.”
Specific foods that saw the biggest price decreases at the Foodstuffs co-ops in February were orange kūmara (down -54% YOY), yellow capsicum (-33%) and telegraph cucumber (-29%).
Foodstuffs’ produce specialists say prices were largely stable in February thanks to the sunny weather, with particularly good value for capsicums and tomatoes, as well as melons and berries.
Looking ahead, they say produce prices could see some volatility due to the currency exchange rate affecting fruit imports, and dry conditions affecting the west of the North Island.
“We’ve always said that two unpredictable factors play a big part in New Zealand food prices: global market forces, such as the supply and demand of commodities and strength of the Kiwi dollar, and severe weather events like droughts and cyclones, here and overseas,” says Quin.
The co-ops’ freight specialists say diesel costs are lower than the same time last year, while shipping costs per container remain elevated.
Foodstuffs’ supplier costs rose 2.8% in February (YOY) for goods in the co-ops’ FPI basket. Earlier, Infometrics reported a 1.8% rise in the Grocery Supplier Cost Index across 60,000 goods the co-ops stock, noting higher global prices for NZ dairy and beef and imports like chocolate and coffee.
Quin says February 2025 was the seventeenth month in a row that the co-ops’ rate of retail price increases was lower than the rate of supplier cost rises for foods in their FPI basket.
“With supplier costs accounting for around two-thirds of the retail shelf price, our co-ops have been absorbing such pressures because we’re determined to keep a lid on food price inflation.
“Given the ongoing predictions of more inflation in 2025 due to tariffs, that focus will continue: We’ll keep buying well and running our co-ops, stores and supply chains as efficiently as possible, so we can keep delivering value at the checkout.”
