Rising food prices may make it harder for low-income shoppers to get enough healthy food, experts say.
Stats NZ said this week food prices were 8.3% higher in August 2022 than in August of last year. It was the biggest annual increase since July 2009, when food prices rose 8.4%.
Dairy and consumer food analyst at Rabobank. Michael Harvey said that if food inflation stood tall for a long time and continued to affect the amount of discretionary income households had, low-income consumers would find it difficult to maintain a healthy diet or buy enough food.
Many consumers responded to food inflation by “trading down,” he said, and buying cheaper options.
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Some began to buy food in bulk. Others cut back on eating out, she said. Some would buy more canned goods.
But the downside trade was different based on income levels, he said.
These were different stages that especially low-income consumers went through before arriving at a place where they skipped meals, Harvey said.
A 2014 Auckland City Mission report showed that the only expense families from low-income households had the power to cut was their weekly grocery shopping. These families only bought food after paying rent, debts, and utility bills.
Carol Wham, professor of nutrition for public health at Massey University, said there were anecdotes of rising food prices compromising the food choices consumers were making.
SUNGMI KIM/Things
Consumers are trading down and buying less expensive foods, which may be less nutritious, to get ahead of rising food costs.
There would be no hard evidence to substantiate this until the next proposed national nutrition survey was completed.
Milk was a good example of a food that was priced out. Rising costs meant that per capita milk consumption was low among those who needed it most, Wham said.
Cheap ultra-processed foods, such as instant noodles, whole foods rich in displaced nutrients. This was a key contributor to obesity, Wham said.
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Rabobank consumer food and dairy analyst Michael Harvey says that despite rising food costs, many food companies are not making more profits.
Consumer resistance to food prices was part of rebalancing a market, Harvey said. But there were plenty of factors affecting food prices that shoppers couldn’t influence.
A key factor was agricultural staples such as milk or vegetables, which are now expensive to produce due to the rising cost of diesel and fertilizer, he said.
Political events also had to stabilize, he said.
There were high costs throughout the food value chain. Even the costs of packaging or processing the food were high, he said.
Food companies had passed on higher costs to consumers over the past six to 12 months. But companies’ margins were also shrinking, he said.
Some retailers reported passing their costs on to consumers, but made no further profit from it, Harvey said.
