Many Kiwis notice that their weekly grocery bill feels heavier - even when official food inflation data shows prices stabilising. Let's break down why your receipts still sting, what's really happening with grocery prices in New Zealand, and how you can adjust your shopping to protect your budget.

CPI Is Only 3% - So Why Do Our Grocery Bills Feel Much Higher?

Every few months, we hear the same headline:

CPI is around 3%

On paper, that sounds reassuring. A 3% CPI suggests prices are rising slowly and living costs are stabilising.
"That's not what my supermarket receipts look like."
Your weekly grocery bill hasn't gone up by 3%. It feels more like 10%, 20%, or even more compared with a couple of years ago. So what's really going on?

What CPI Actually Measures (and What It Doesn't)

CPI (Consumer Price Index) is an average measure of price changes across a very wide basket of goods and services, including:

  • Rent and housing costs
  • Transport and fuel
  • Power, internet, insurance
  • Healthcare and education
  • Entertainment and travel
  • Groceries and household items

Groceries are only one part of the CPI basket. That means:

  • If petrol prices fall
  • Or mortgage interest rates ease
  • Or electronic get cheaper
These can offset sharp increase in food prices, pulling the overall CPI number down. So CPI 3% does not mean groceries went up only 3%.

Why Supermarket Inflation Feels So Much Higher

1. Food inflation is often higher than headline CPI

Food prices are more volatile than many other CPI categories. In New Zealand, food inflation has frequently been well above overall CPI, especially for:

  • Fresh fruit and vegetables
  • Meat and dairy
  • Snacks and packaged foods
  • Household essentials

Enven when CPI falls, food prices often stay elevated or keep raising

2. We Shop for groceries every week -- CPI is abstract

CPI is statistical average. Groceries are felt immediately, every single week.
You might not buy a TV every year or change insurance provider often -- but you see grocery process contantly. That makes food inflation:

  • More visible
  • More emotionally frustrating
  • More painfaul for household budges

3. Shrinkflation: Paying more for less

One of the biggest reasions CPI feels disconnected from reality is shrinkflation
Examples you may have noticed

  • A cereal box that used to be 500g is now 420g
  • Chips bags with more air than chips
  • Ice cream tubs quietly shrinking
The price tag may stay the same, but
  • Price per 100g goes up
  • Value goes down
Offical CPI often struggles to fully captures shrinkflation, but your wallet definitely feels it.

4. Shopping habits don't match the "Average" household

CPI is base on a theoretical "average" household. But real people aren't average.
If you:

  • Have kids
  • Buy fresh produce weekly
  • Avoid ultra-cheap processed food
  • Have dietary restrictions
Then foold likely makes up a much larger share of your spending than CPI assumes, that means your personal inflation rate is higher than 3%

Supermarket Pricing Has Changed - Permanently

Another uncomfortable truth, some grocery price increase are not temporary.
Factors includes:

  • Higher supplier and logistics costs
  • Reduced competition in certain categories
  • More reliance on promotions instead of genuine price drops
  • Private label products quietly rising in price too
Even when inflation "comes down", proces often don't get back down -- they just rise more slowly.

Why This Matters for Kiwi Households

When pricemakers say inflation is "under control", many households feel left behind.
It's not because CPI is fake -- it's because:

  • CPI isn't designed to relfect weekly supermarket pain
  • Food inflation hits lower and middle income household harder
  • Groceries are non-negotiable spending
You can delay a holiday, and you can cancel a subscription, but you can't stop buying food.

What You Can Do (Even If CPI Doesn't Reflect Reality)

While we can't control CPI, we can control how we shop.
That's why tools like NzGrocerySaver exist -- to help shoppers

  • Compare orices across supermarkets
  • Track price in real time
  • Spot genuine discounts
  • Avoid quietly rising everyday prices
Because when inflation feels higher than 3%, smart shopping becoming essential.

Final thoughts

CPI might say inflation is 3%, but your supermarket receipt tells a different story -- and it;s the one that affects your life every week.
Understanding the gap between official numbers and real grocery costs is the first step toward taking back control of your food budget.
At NzGrocerySaver, we believe transparency matters -- especially when price doesn't match the headlines.