If standing at the checkout, waiting to find out the cost of your weekly shop has become an anxiety-inducing activity, you’re not alone. The cost of living has become Kiwis’ biggest worry, according to a Consumer NZ survey – surpassing previous national concerns of Covid-19 and rising house prices.
The amount of money needed to cover basic expenses such as housing, food and petrol has spiralled out of reach for a growing number of Kiwis, including here in Hawke’s Bay, where locals are feeling the strain.
In Hastings a mother goes hungry so her children can eat, a couple from Flaxmere regularly have to choose between eating and fueling their car, and in Napier a double income family queues for the first time to receive rescue food. As living costs soar, citizens are making heartbreaking sacrifices simply to survive.
Inflation at a three-decade high
None of us have escaped the growing cost of living. Inflation has hit 6.9% — the highest rate in more than thirty years, according to Statistics NZ, and it’s showing no sign of slowing. The figure follows an annual increase of 5.9% in the December 2021 quarter.
Driven by an increase in housing and petrol prices, the cost of living for the average household has grown significantly in recent years. Construction firms have experienced supply chain issues, as well as higher labour costs and demand, pushing up the cost of building new houses, according to the Consumers Price Index. Climbing prices for rental properties have also had an impact.
While New Zealand is not alone, with many other OECD countries experiencing higher inflation, this is little comfort to the growing number of people struggling to make ends meet.
Suffering at the check-out
Keeping our tummies full has become significantly harder in the past year. High food prices are making for misery at the checkouts, with a growing proportion of people struggling to afford their grocery bills.
Statistics NZ figures show annual food prices remain elevated, following a 10-year high in March. In April this year, food prices were 6.4% higher compared to the same month last year. This was due to increases across all food categories including grocery items, which increased 6.4%, restaurant meals and ready-to-eat food, 5.3%; fruit and vegetables, 9.4%; meat, poultry and fish, 8.1% and non-alcoholic drinks, 2.8%.
Restaurant meals and ready-to-eat food had the largest monthly increase in more than a decade, up 1.4% in April 2022, compared to the previous month. This was mainly due to higher prices for dine-in lunches, burgers and coffee, Statistics NZ consumer prices manager, Katrina Dewberry says in a statement.
Supermarket items have had the biggest impact on the upward price trend, due to increases in the cost of staples such as cheese, milk and eggs, says Dewberry. “Inflation of food prices has generally been increasing since a low of 0.5% in the year to March 2021.”
Walk into any supermarket and the prices for basic items can be eye-watering. A block of cheese for $16, a dozen eggs for $7, a block of butter for $7, a block of chocolate for $5, a packet of nappies for $15 and a whole chicken for $15.
Shoppers are feeling it. You might be buying the same items but they’re costing you a lot more. In 2019, a family of two adults and two children living in Hawke’s Bay spent on average $329 a week on groceries. The same trolley would now cost $367, according to the Reserve Bank’s inflation calculator.
On the frontline of food support
Christina McBeth describes herself as having a front row view of the community’s struggles. As co-founder of food rescue operation Nourished for Nil, each week she speaks to locals at their five depot locations, who tell her how essential the service is to them. “I’ve heard people saying the reason they’re eating is because they come to us,” she says.
McBeth and Louise Saurin started the organisation in 2017 and since then demand for their rescue food has soared. Covid-19 has had a significant impact, but it’s the past year where McBeth has seen the most dramatic increase in need. Typically during the colder months client numbers decrease, but this winter numbers have increased to levels they would usually only see in the summer – up 15% for this time of year. In central Hastings and Maraenui there are often more than 200 people queuing for rescue food, and in Flaxmere, more than 300.
And the demographic has changed too. Once a service largely supporting the homeless and working poor, there’s been a noticeable jump in the number of pensioners and double income families, says McBeth.
“Something else that’s new is the number of new faces coming every time we’re open. That’s definitely changed.” Many tell her they wouldn’t have come before, but now they simply can’t do without some extra support, she says. “I suspect it’s gone from more of a top-up to ‘if we don’t have this, we’ll go hungry’,” says McBeth. Taking the step of asking for help isn’t easy and is something people often grapple with for some time, before reaching out, she says.
The Napier and Hastings food banks recently merged with Nourished for Nil, so it now offers a dual service to locals. In the mornings the organisation acts as a food bank, making and giving out food parcels to people referred from social agencies. Each parcel is a four-day supply for a family of four and includes staples such as cheese, rice, pasta, and vegetables.
In the afternoons, the Nourished for Nil depots provide a food rescue service, which is open to everyone. This service is reliant on donations from a number of suppliers and funding, so doesn’t necessarily cover all of the pantry staples, but it is always “an amazing variety of food”, says McBeth. Careful planning and stockpiling food when they have an excess has ensured they never run out of food and have never had to turn anyone away empty-handed.
Comfort food and easy to make meals are particularly popular at this time of year and during times of struggle, says McBeth. “It’s your bread and bakery, any frozen meals like pizza, or pies are always incredibly popular, and meat.”
In the five years of operation to February this year, the organisation reached a significant milestone – it has rescued and redistributed 2.5 million kilos of food back to the community.
Urgent change needed
Supermarket price freezes will have little impact on consumers’ wallets and don’t address underlying problems in the sector, say experts. Foodstuffs, the owner of New World and Pak ‘n Save supermarkets, announced it would be rolling back the prices of 110 of its most popular items to last year’s prices from May 16 to August 14. The announcement came after Countdown said it would freeze the prices of more than 600 essential items this winter.
Consumer NZ says high food prices, fuelled by little competition in a highly-concentrated supermarket industry, are unacceptable. The organisation has been campaigning for much-needed change and recently launched a petition calling for fairer prices at the checkout. Currently two suppliers – Foodstuffs and Woolworths NZ – dominate the market.
“Every day the supermarkets are making more than $1 million in excess profits. The supermarkets’ profitability is twice what it should be. We need more competition to drive down prices and give New Zealanders a fairer price at the checkout,” says Consumer NZ chief executive Jon Duffy in a statement.
“We recognise that food prices are going up for a variety of reasons, from the pandemic, to inflation, to the impact of the war in Ukraine on wheat prices. We’re not disputing this, but excess profits on top of already high food prices are a slap in the face for households struggling to put food on the table,” he says.
A Government announcement in May has sent a clear message to supermarkets: the lack of competition must change or be prepared for more regulation. “The Government and New Zealanders have been very clear that the supermarket industry doesn’t work. It’s not competitive and shoppers aren’t getting a fair deal. The duopoly needs to change, and we are preparing the necessary legislation to do that,” says Minister of Commerce and Consumer Affairs, David Clark.
The response comes as part of the Government’s reaction to the Commerce Commission’s market study into New Zealand supermarkets. The Commission made 14 recommendations including introducing a mandatory code of conduct and establishing an industry regulator. The Government has accepted 12 of the recommendations and is taking stronger action on the other two.
Emotional toll surging
The supermarket isn’t the only place people are feeling the strain. Mortgages, rent and petrol have also gone up, leaving people squeezed from every direction. Budgeting and social support services are stretched to the limit, helping a growing number of clients who need support to make ends meet. Many of them have never needed help before.
At Napier Family Centre, the financial capability services team expect to see a huge spike in demand from locals for their services, who come from a range of socioeconomic groups, including working families. The upwards trend is similar to the one they experienced during the Global Financial Crisis and is likely to continue for a few years, due to the impact of Covid-19 and rising cost of living, says financial capability services manager, Debbie Mackintosh.
Staff are also receiving more KiwiSaver withdrawal and hardship withdrawal enquiries, and many clients are struggling with multiple split payment plans such as Afterpay, Oxipay, and Humm. The plans, which allow people to buy now and pay later, come with high interest rates and default fees if payments are not made on time, pushing them further into debt. In addition, high rental costs, along with increases in petrol, power, food and other basic living costs are leaving many “unable to make ends meet or relying more on overtime and other supplementary income,” says Mackintosh.
At Citizens Advice Bureau in Hastings, it’s the same story. There’s been a noticeable increase in people wanting budgeting and financial support due to rising living costs, says manager David Gerbault. “Food is always the primary one – people are always wanting to make sure their kids have a full belly,” he says. There are also concerns around rising interest rates, petrol and rent. Everyone is cutting back and looking for different ways to make ends meet, says Gerbault. The organisation provides a range of services to help people understand their rights and access the services they need.
It’s not just the financial burden however, but the emotional impact on families, that’s a huge concern, says Mackintosh. “Financial hardship as a result of Covid-19 and the rising cost of living affects day-to-day family experiences, and has a serious toll on our community wellbeing,” she says. “Financial difficulties are damaging relationships, impacting domestic violence, affecting children, and mental health.”
Sometimes there’s no way of getting out of debt, and insolvency is the only option. But when debt can be lifted from a family it has a huge positive impact on everyone, says Mackintosh. “It feels like the sun is shining again; the mood changes and it uplifts everyone in the family.”
Data shows just how much the cost of living has ballooned in recent years, and nobody has escaped the impact. Those on fixed incomes such as beneficiaries and superannuitants have been hardest hit, but across the board we are all feeling the sting. While many of us are trying to change spending behaviour to keep our heads above water, for many, there’s simply no fat to cut out.
The effects of rising living costs are likely to be long-term and far reaching – impacting the physical, emotional and mental wellbeing of our families and communities. Recent government action on supermarkets is a step in the right direction regarding food costs, but further work is needed, and fast. Paying for life’s basic necessities is a human right and urgent change is needed to alleviate some of the stress many people are currently feeling.
Napier family feels the squeeze
Katie Bachman, her wife, Rochelle, and their young son have gone from being a comfortable double income family to often having nothing leftover each week. Covid-19 hit the family hard financially, and the rising cost of living has left them feeling the pinch even more in the past year.
While they are grateful their rent hasn’t gone up, increases in petrol and groceries have had the biggest impact on the Tamatea family, which Bachman describes as being in the “squeezed middle income bracket”. “The price of groceries has gone up pretty dramatically,” she says. “What we used to be able to do for $150, then became $200 which is now creeping into $240 for the same shop … Where do you find that extra money?”
Both trained chefs, Bachman and her wife cook their meals from scratch and ensure their family is eating healthy, balanced meals, but it’s increasingly getting harder to buy the basics. The family’s weekly grocery shop is well planned out, they always buy the cheapest brands available and each item is carefully considered before being put in the trolley.
Last week, she and her wife had a “massive debate” at the supermarket about whether to get two blocks of butter, at $7 each. In the end,
they just bought one. Other basics are also out of reach. “When you look at a block of cheese and it’s approaching $20 a block, it’s like well, I guess we’re not going to have that cheese this time.” The price of grocery items often forces them to make decisions about whether to buy quantity over quality, says Bachman. Bachman has been going to Nourished for Nil for the past five years, to support the rescue food operation and to take a little bit of financial pressure off her family. Bachman admits she’s luckier than lots of people impacted by increased living costs, but her family still needs to be careful about their spending, to ensure their money goes as far as possible. So many people are experiencing financial pressure that they’ve never had before and looks can be deceiving, says Bachman. ‘Overall people see someone who might be well-dressed, well-presented and think they’re not struggling … or somebody who’s college educated and well-spoken and thinks they don’t have anything to worry about. But then at the end of the week a lot of us who do fit that bill are definitely feeling the squeeze.”
Where to get help
Salvation Army Food assistance, budgeting advice, clothing assistance and support.
• 56 Tait Drive, Napier- Ph 844 4941
• Corner Warren Street and Avenue Road, Hastings- Ph 876 5771.
Nourished for Nil Provides food parcels via referrals and rescue food to everyone.
• 1004 Karamu Rd, Hastings
• 703 Kiwi St, Camberley, Hastings
• 400 Swansea Rd, Flaxmere
• 30 Cranby Cres, Napier
– For more information go to nourishedfornil.org
Budget First Financial mentoring and support.
• 111 Warren Street North, Hastings- Ph 878 0530
Citizens Advice Bureau Offer advice about citizen’s rights and how to access services.
• Bower St, Napier South- Ph 835 9664
• 12 Queen St East, Hastings- Ph 878 0525
Napier Family Centre Provide wellbeing services to families in need including budgeting, home-based support and playgroup.
• Corner Morris Spencer Avenue and Wycliffe Street, Napier- Ph 843 7280