According to Statistics New Zealand, food prices fell 0.8% in December while the year's food prices increased by 0.6% led by vegetables, milk and butter.
Milk rose 6.1% to $3.32 for two litres while butter rose 34% to $4.12 for 500g.
SNZ's consumer prices manager Matt Haigh said lower food prices were seen across most food items last December, with non-alcoholic beverages falling 3.1%.
ASB economist Kim Mundy said the 0.8% December decline was ``slightly lower'' than expected.
Vegetable prices fell for the fourth month in a row in December, led by cabbage, broccoli, and cauliflower.
Mr Haigh said the seasonal movement was expected as we move through summer.
``December has been the cheapest month for these kinds of vegetables for the past five years,'' he said.
Ms Mundy said the main contributors to the 0.6% increase were groceries and restaurant and takeaway sectors.
