Food prices in New Zealand experienced their smallest annual increase since September 2018, rising only 0.2 percent in the 12 months to May 2024, according to data from Stats NZ.

This minor rise in food prices was mainly driven by significant decreases in the cost of fruit and vegetables, which fell by 11.4 percent, and meat, poultry, and fish, which dropped by 1.2 percent.

James Mitchell, Stats NZ's consumer prices manager, highlighted that this is the first annual decrease in meat, poultry, and fish prices in over three years, largely due to cheaper lamb chops, legs of lamb, and chicken pieces.

Despite the overall increase in food prices, specific categories saw reductions that contributed to the lower overall inflation rate.

"Prices for meat, poultry, and fish recorded an annual decrease for the first time in over three years," said Mitchell. "The decrease was driven by cheaper prices for lamb chops, legs of lamb, and chicken pieces."

However, not all food categories saw decreases.

Restaurant meals and ready-to-eat foods led the increase with a 4.8 percent rise, followed by grocery food prices at 1.3 percent and non-alcoholic beverages at 2.7 percent.

"Eating out and ordering in are still taking the cake when it comes to the overall annual increase," Mitchell noted.

One standout in the latest data is the price of cheese, which saw a significant decline.

A 1kg block of cheese cost $10.02 in May 2024, down from $13.60 the previous year.

"Of all the items in the food basket, cheaper cheese prices had the largest impact on overall food prices," Mitchell explained.

"Despite this, there was enough inflationary pressure from other items to record an overall food price increase."

Additionally, food prices fell by 0.2 percent in May 2024 compared with April 2024, marking a contrast from the 0.6 percent increase seen in the previous month.

This decline was driven by lower prices for grocery foods, particularly yoghurt and potato crisps, and marked the fourth consecutive month of falling fruit and vegetable prices, with mandarins, potatoes, and apples leading the drop.

"May 2024 saw the largest number of food items falling in price in over three years.

Fifty-three percent of the items we track prices for fell in price during May 2024, compared with 44 percent of items, which were more expensive," said Mitchell.

In addition to food, petrol prices also fell in May 2024.

Prices for petrol decreased by 2.6 percent and diesel by 3.3 percent compared with April 2024.

"Motorists around the country enjoyed lower fuel prices in May, but they are still higher than May 2023," Mitchell said.

He added that the removal of the transport temporary relief package partly contributed to the higher prices seen this year.

Petrol prices are now over 50 percent more expensive than four years ago, while diesel prices are over 80 percent more expensive.

Overall, the smaller increase in annual food prices offers some relief to Coasties and others across New Zealand, with cheaper prices for essential items like cheese and lamb providing a buffer against broader inflationary pressures in other food categories and fuel prices.