Food prices are rising much faster than wages, putting more pressure on household budgets and creating a squeeze that's feeling worse for some than the global financial crisis, one economist says.
Stats NZ data for August shows prices were 5 percent higher than a year earlier.
Depending on how wage growth is measured, incomes are growing by as little as half that.
Simplicity chief economist Shamubeel Eaqub said it was a "slow grind" for households waiting for some relief from the economic downturn and cost of living crisis of the past few years.
He said while there had been forecasts that the recession and recovery could be like the global financial crisis, it had proven to be deeper and longer.
The cost of living for most households had remained high even as inflation dropped, because it was some of the things that were bought less frequently that were dropping in price the most rather than the core costs that people had to spend money on regularly.
"Regularly experienced necessities inflation is very high. It feels a lot more present," he said.
Higher prices for the grocery food group, up 4.7 percent, contributed most to the annual increase in food prices.
That was largely down to the increase in milk, cheese and butter. Milk was up 16.3 percent to $4.72 per two litres, cheese up 26.2 percent to $12.89 for a kilogram block and butter was up 31.8 percent year-on-year to $8.58 per 500g.
The average prices for milk, cheese, and butter represent the cheapest available option for each.
Prices for the meat, poultry, and fish group, up 8.1 percent, was the next largest contributor to the annual increase in food prices.
The increase in the meat, poultry, and fish group was driven by higher prices for beef steak, beef mince, and lamb leg.
"The average price for beef mince was $22.53 per kilo in August 2025, that's an increase of $3.40 in just one year," Stats NZ spokesperson Nicola Growden said.
Fruit and vegetables were up 8.9 percent, restaurant meals and ready-to-eat food 12.4 percent and non-alcoholic beverages 3.9 percent.
Eaqub said price rises were likely to continue, but not at the same rate that they had been.
The lowest-earning households were struggling significantly more in this downturn, he said.
Infometrics chief forecaster Gareth Kiernan said there was already some softness showing up in dairy prices internationally.
"There's still pressure on the meat side of things so I'd expect to see that running for a bit longer, some of it's a bit seasonal in terms of fruit and vegetable prices... you'd expect that to revert to something a bit more normal as well. There's just a general sense that there's limited scope to put up prices.
"In the food space we tend to be more of a price taker, so that demand situation isn't quite as important as in other parts of the economy but it does put a bit of a squeeze there."
He said that given inflation generally was expected to soften, and the lift was considered temporary, the Reserve Bank was unlikely to be too worried.
"There is pretty strong consensus among analysts that inflation will moderate by early next year so it's just a case of looking through the near term stuff."
