Summer of stats part I – What food costs

By Guest Author 22/12/2009 2


A running series from Statistics New Zealand helping us make sense of the Food Price Index and the Consumers Price Index…

Priceshifting

1          What food costs

It paid to make your own New Year’s Day lunch this year.

Unless your tastes have changed, your summer lunches should cost about the same as they did last year. If you serve lots of fruit and vegetables, they might cost less. If you have takeaways or eat out, you will pay a little more. At least, that’s what Statistics NZ’s most recent Food Price Index tells us.

The Food Price Index tracks changes in our food prices and it’s based on what you actually pay. Every month, Statistics NZ sends staff into the national marketplace to gather prices. Fresh fruit and vegetables prices fluctuate more often, so they are gathered every week.

Data collectors call at about 650 retail outlets in fifteen towns and cities. As well as supermarkets, they visit service stations, dairies, local grocery stores, butchers, fish shops and greengrocers. They include one supermarket from each chain in each region, except Auckland, where two supermarkets from each chain are used.

The monthly Food Price Index does not actually report on prices — it looks at how prices shift from month to month and year to year. So it’s important to collect the prices of a similar ’basket’ of food each month.

The current basket contains 154 items. It includes fruit and vegetables, meat, poultry and fish, coffee, tea, soft drinks and other beverages, restaurant meals and takeaways, and ’grocery’ food – bread and cereals, milk, cheese and eggs, oils and fats, additives and condiments, confectionery, nuts and snacks. Each type of food is given a weighting to reflect how much we spend on what.

stats - food

(THE ABOVE CHART IN TEXT: About $21 of every $100 spent by households on food is spent on eating out or takeaways. About $17 of every $100 spent on food is on meat, poultry and fish, and about $14 is on fruit and vegetables. Non-alcoholic beverages such as coffee, soft drinks and fruit juice account for $10, and the remaining $38 is spent on grocery food.)

Fruit and vegetables pose a seasonal challenge, so the basket can’t be too specific. It includes broad categories like stone-fruit (eg nectarines), berries (eg strawberries) and brassicas (eg broccoli and cabbage).

How do Statistics NZ analysts decide what goes into the basket?

They don’t really. Consumers decide.

The basket contains items that reflect consumer behaviour, based on an analysis of the food households actually buy. The main source is the three-yearly Household Economic Survey. Data from this detailed, face-to-face survey of 2,600 household is supplemented by information from food manufacturers and distributors, and supermarket scan data.

As our tastes, lifestyles and incomes change, we change what we eat. New products also affect our food choices. So the contents of the Food Price Index basket change too.

In 2008, the country was stunned to hear that saveloys were no longer in the basket. The fact is we eat more bacon, sausages, luncheon sausage, and salami than saveloys — even if you include cocktail sausages (or even cheerios) — so those items better represent what we eat in the prepared meats and small goods category.

But there’s more. We spend only a little more on saveloys than we do on liverwurst and pate. Bon appétit.


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