Food prices broke a sequence of four consecutive months of falls by rising 0.9% in January - but this still saw the annual rate of increase drop to 4.0% - its lowest level since November 2021.
Stats NZ's recently introduced Selected Prices Indexes (SPI), which cover about 45% of items included in the Consumers Price Index measure of inflation, show that in January there was a substantial 2.5% rise in rents for new tenancies, although the annual increase actually fell to 6.8% from 7.0%.
The 'stock' measure for existing tenancies rose 0.3%, edging the annual rate of increase for this measure up to 4.5% from 4.4% and well ahead of the Reserve Bank's 1%-3% inflation target. Rental prices make up about 9.5% of the total CPI.
The stock rental measure has been increasing for the past year, having gradually risen from an annual rate of increase of 3.8% as of January 2023 to the annual rate of 4.5% for January 2024.
Going in reverse, however, were airfares. Domestic airfares reversed the big seasonal hike of December, to drop 12.2% and be down 5.2% on an annual basis, while international fares plunged 21.6% in the month to be down 31.5% on an annual basis.
Stats NZ's consumer prices manager James Mitchell said the biggest contributor to the monthly food price rise [food prices make up 18.8% of the CPI] was grocery food, driven by prices for boxed chocolates, 2 litre milk cartons, and fresh eggs (excluding free-range eggs). Other items that have contributed to the monthly rise include apples and legs of lamb.
Cigarette and tobacco prices increased 6.4% in January 2024 compared with December 2023 and increased 10.3% in the year ended January 2024.
"Increases in cigarette and tobacco prices are usually seen in January when excise duties are applied," Mitchell said."The most recent large rise outside January was the 2.7% monthly rise in October 2023."
ASB senior economist Mark Smith said January saw the usual seasonal increase for food and accommodation prices, but this was offset by sharp falls for airfares.
"Looking through the seasonal variability it is apparent that the trend in underlying price rises is cooling," he said.
Smith said the latest data would have increased the RBNZ’s comfort that headline inflation is on track to move below 3% by the second half of 2024.
"Nonetheless, the RBNZ will be wary over more elevated rates of services inflation and will keep monetary conditions tight. OCR [Official Cash Rate] cuts are extremely unlikely until the second half of 2024."
Here is the detailed SPI information as supplied by Stats NZ:
| Group, subgroup, class, item, or selected section | January 2024 monthly percentage change (compared with December 2023) | January 2024 annual percentage change (compared with January 2023) |
| Food group | 0.9 | 4.0 |
| Fruit and vegetables | 0.3 | -1.2 |
| Meat, poultry, and fish | 1.0 | 1.4 |
| Grocery food | 1.7 | 5.2 |
| Non-alcoholic beverages | 1.0 | 4.4 |
| Restaurant meals and ready-to-eat food | 0.3 | 6.7 |
| Alcoholic beverages and tobacco group | 3.1 | 7.2 |
| Alcoholic beverages | 0.6 | 4.8 |
| Cigarettes and tobacco | 6.4 | 10.3 |
| Housing and household utilities group | ||
| Stock measure of rental property | 0.3 | 4.5 |
| Flow measure of rental property | 2.5 | 6.8 |
| Transport group | ||
| Petrol | -1.5 | 9.9 |
| Diesel | -2.2 | -9.0 |
| Domestic air transport | -12.2 | -5.2 |
| International air transport | -21.6 | -31.5 |
| Recreation and culture group | ||
| Domestic accommodation | 3.3 | 8.5 |
| Overseas accommodation | 5.0 | 8.9 |
77 Comments
If you liberalise zoning my mates are willing to pay some extra taxes.
win-win. Govt gets more revenue, land supply increases and section prices drop, councils get more rates from more ratepayers and landowners are freed from green and red tape.
Lets do this!! (remember that catch cry before nothing happened)
This Jan/Feb is probably the first time where I've actually been shocked at the price increases of things I've paid for. I've been tolerant of mild inflation over the last year but the recent price hikes seem to me to be quite extreme. I've just been checking my visa statement to see where all the money went, and the grocery spend is getting ridiculous.
100% agree.
We've seen little change mainly thanks to chinese vege stores, markets, bulk buying, etc. Even when food inflation was 'rampant' we didn't notice it much. We just substituted products. I've love to know what everyone else is buying. And from whom. (That ozzie supermarket is seriously expensive and has lost our custom completely.)
And wine's gone up? Not my favorites. One went up, three went down (none on special and all low to medium price).
Petrol (at least for premium grades) seems to be creeping right back up again. $3.18 this morning for 98 at the BP where I fill up. I only fill my car every 6-8 weeks - my other car is an ebike - so it's not a biggie for me, but no fun if you need to fill up frequently.
Has anyone adjusted their expenditure to reflect the increasing costs?
As a household our meat consumption has fallen, we are more selective in what fruit and vegetables we buy and alcohol has all but dropped from our radar. The weekly food bill hasn't changed much but what we buy has.
Yep we have.
Alcohol spend is way down (one bottle of wine every three weeks, rather than 2 bottles per week), but I am doing that as much for health reasons as financial ones. Alcohol as a treat rather than a habit.
Focussing on seasonality for fresh produce. And trying to go to Chinese stores and markets as much as possible.
And yep reduced meat consumption as well as making the most of specials when they arise.
A large section of NZ society, it seems. I have almost cut out alcohol this summer after I put out a couple of too heavy bins of glass recycling as the only drinker in the house. We moved to chicken, fish, or vegetarian. I try to make meals from scratch, and I make stuff that stretches over 2-3 days as I'm busy. A roast chicken one night leads to a risotto the next. I feel healthier, throw out a lot less packaging, and enjoy the bank balance.
My Wife and I have given a lot of the Instagram dinners we've seen on there a go (did Salmon Poke, Korean Sticky beef slow cook, Zinger Sliders and a really nice peanut chicken noodle type dish). Absolutely incredible flavour, affordable and tastes better than takeaways. By doing that we've saved the most on discretionary spend in the last 2 weeks I can recall. Takeaways are ridiculously expensive and spending $35-$50 each time for one dinner is just ludicrous when we can spend $20 and get dinner + lunch. We feel better and happier and saving heaps of $ - just need to spend a little bit the first time on the re-occuring ingredients such as, oyster sauce, soy sauce, siracha, sesame oil etc
Dec 2022. My Thai Chicken and cashew nuts, $23.90. Stopped eating Thai. Never had it again.
Pak n Save. Three Wolves broke $21.99 early last year. Bought 3 dozen since incl purchase for Xmas due to family being here.
Essential vs discretionary. Amazing what we think is 'essential.' Then again, we have a reasonable household income...And the Honda now is on 210 km, possibly worth $1500. Love it
Bulk cooking is key as it saves so much time after work and leftover lunches are tasty. Most fruit and veg form local outlets, eggs straight from the poultry farmers. We have access to some home kill beef every year through contacts and only eat it on occasions really. Bacon, chicken and the odd salami are the main meats and not daily by any means. Plenty of lovely sauces to make, salads to have, and beers to brew to save money, plus a good garden variety of fruit and veg growing. I scoff at $25 for a 6pack of craft beer at the supermarket when I can make it for the equivalent of ~$0.30-1.50/can in input costs not factoring in my labour.
What happened to the grocery commissioner doing stuff at ComCom? Anyone know how to get things going there? I know people who tried reporting gouging, non competitive and anti competitive practices and they said they'd set up meetings and haven't responded to sort that out for weeks.
I wonder if prices at the supermarket have increased over the last couple of years to help cover the costs of all the online ordering and deliveries? Staff wages to pick and pack, trucks and drivers, computer system...
Often see 4 or 5 staff at our local supermarket doing online orders. Would of thought they could do 2 or 3 an hour at the most from start to finish.
Does the delivery and shopping on line fee cover all of the costs, or are we all paying for it by a general increase in food prices???
Never used the service myself so not sure of the costs. I actually like going to the supermarket.
Interesting point. My issue with these ‘shoppers’ is how they block the isles. I also wonder if people using this service care about getting stuff with a nearer sell by date. They reach out and pick the first thing off the shelf. I always look for the longest date, particularly on bread often you can find bread giving you an extra couple of days to use it.
No, those two things are not aligned. We didn't see rent drops with interest rates fell to the 1.x% rates.
Rental demand and people's ability to pay are the main drivers of rents. We're importing a lot of people so expect rents to rise, also house prices although interest rates do have a say in those (as they limit people's ability to borrow).
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.