Food prices rise, while transport prices drop

Thursday, 15 August 2024

Food inflation, staff shortages, soaring interest rates, and patchy customer demand are all pushing hospitality into survival mode.

Food prices have increased, the cost of petrol and domestic air travel has dropped and card spending is still on the decline, according to data released by Stats NZ.

Food prices

Food prices increased 0.6% in the 12 months to July 2024. The increase followed a 0.3% decrease in the 12 months to June 2024.

The increase in food prices was partly driven by higher prices for restaurant meals and ready-to-eat food, which increased 3.7% in the 12 months to July 2024.

Despite the annual increase in overall food prices, prices decreased for fruit and vegetables (down 8.5%), and meat, poultry, and fish (down 1.1%).

Cheaper prices for kumara, lettuce, and potatoes drove the fall in fruit and vegetable prices.

Food prices increased 0.6% in the 12 months to July 2024.

“Kumara prices dropped to $5.72 per kilo, almost one-third of the peak price of $14.25 per kilo in January 2024,” consumer prices manager James Mitchell said.

Food prices had also increased monthly, with a 0.4% in July 2024, following a 1% increase in June 2024.

Fruit and vegetables were the largest contributor to this increase, with prices up 4.5%, while adjusting for seasonal effects, fruit and vegetable prices were up 0.8%.

“Price increases were seen from typical seasonal produce such as tomatoes, cucumbers, and apples,” Mitchell said.

Transport prices

Petrol prices fell 0.5%, while diesel prices fell 0.2% in July 2024. The Auckland regional fuel tax of 10 cents per litre plus GST was removed on 30 June 2024.

Domestic and international air travel had dropped in price.

“Despite an overall decrease in petrol prices, Auckland was the only region to see lower prices in the month, while every other region in the country saw an increase,” Mitchell said.

Meanwhile domestic air travel had dropped 15.4% annually and international air travel declined 10.6%. Although both experienced monthly increases of 6.4% and 3.8% respectively.

Electronic card transactions

Spending across the country was a mixed bag for July 2024 compared to the previous month.

Spending in the retail industries decreased 0.1% ($6.3 million) and spending in the core retail industries decreased 0.5% ($26m).

Hospitality transactions were down $17 million (1.4%), apparel was down $6.5m (2.1%) and durables were down $5.7m (0.4%)

Meanwhile, consumables were up $4.5 million (0.2%), motor vehicles (excluding fuel), was up $5.1 million (2.7%) and fuel was up $8.1 million (1.6%).