New statistics show restaurants and takeaway meals are the biggest contributor to rising food prices – but it's not your local chippie who's pocketing the profits
It's been a while since the late Jonah Lomu used to come into Thomas Ng's takeaways store for battered snapper and chips. Nearly six years after Lomu's death, he remembers the giant All Black wing and his family fondly.
Ng and his wife Lilian have been trying to hold their prices since then. They've absorbed most of the rising prices at the fresh fish market – that snapper fillet has gone up just $1 in the past couple of years, to $9.80. And now, with Auckland's lockdown, they're having to absorb an even bigger hit to their income. "But money comes second," says Ng, 86. "It's my customers that come first, and I miss seeing them."
At Fresh Catch in Epsom, the elderly couple are mostly bucking a trend of rising prices. The cost of fish, potatoes, oil, rent, electricity and everything else that goes into your Friday night fish'n'chips means eating out is now the biggest contributor to rising food prices, new statistics reveal.
Statistics NZ published its monthly food-price index this week. It shows the price for a battered fish and a scoop of chips has risen 5.3 percent in the past year, to an average $7.75.
Burgers have risen at the same rate. In June, Newsroom reported that the price of Big Macs was up 30c in the past year, contributing to an increased New Zealand cost of living by the measure of The Economist's world-famous global Big Mac Index. The burger with its two 45g beef patties, cheese, gherkins, lettuce and its famous "special sauce" now costs $6.90, averaged across the company's New Zealand restaurants.
New Zealand's beloved meat pie is up 4.2 percent to an average $4.70, takeaway pizzas are up 5.0 percent to $15.19, and five pieces of fried chicken are up 3.6 percent to $13.36.
But what's behind the rising prices? For McDonald's, as an example, it's increased prices for beef, coffee, dairy and packaging, plus costs to restaurants like utilities and other supplier costs, and increases in labour costs. The minimum wage rose to $20/hour in April this year, affecting many restaurant chains.
Thomas Ng says that when he visits his fresh fish supplier, almost every month he faces a rise in the price of fish. "The price just keeps going up. Every time I go the warehouse or the fishmarket, they keep going up."
Fish has gone up 2.1 percent on the Statistics NZ Food Price Index, and milk for the batter has gone up 8.1 percent. Those rises have been slightly offset by a 2.8 percent reduction in the price of food oils.
"And I say to my wife, we can't put the price up. Not for our loyal customers. We're rather make a smaller profit."
Running a business is so challenging that he would often apply for jobs in the restaurants at big hotels, where he spend much of his career. But he says people were scared to hire him because of his age – so he has stuck with the fish'n'chips shop.
There are demographic pressures too. His shop was always easy to find online, thanks to his regular guest appearances on TV3's current affairs show Campbell Live, back in the day. So tourists would find him on Google, and turn up for their fix of Kiwi fish'n'chips. So too, English language students from overseas. But with the border closures, they're all gone.
In lockdown, the $6200 wage subsidy is enough for them to cover the wages of themselves and their one part-time worker, and to pay the ever-increasing insurance, rates and rent to keep the landlord happy.
So, having been locked down for four weeks, have he and Sng, 77, taken the chance to think about finally retiring? "No, never retire, mate. It's better to just keep going, going. To keep your body and your mind working."
The big question is the impact of the Level 4 lockdown: will the closure of all the country's restaurants and fast food outlets, which continues in Auckland, rein in the fast-rising food price inflation?
Contemporary economists argue that inflation doesn't cause economic growth; rather, it's the other way round. Inflation is a result of a growing economy – and, this week, Statistics NZ will report just how fast the economy was growing in the June 2021 quarter, before it ran into this past month's lockdown and inevitable slowdown.
It's certain that growth will have slowed, at least temporarily, in the lockdown. So restaurant and takeaways prices will be slowed by that, and also by the mere fact that they had to shut up shop for two weeks or more.
This is informed guesswork, to a degree, because Statistics NZ has scant data about how last year's lockdown affected the price of eating out.
"It is difficult to say what happened following last year’s Level 4 lockdown," says Katrina Dewbery, the consumer prices manager. "We were unable to collect prices for restaurant meals and takeaway foods in April."
Statistics NZ started collecting prices again in May, but didn’t have an actual price from April to compare them to. So that data was suppressed from the May 2020 release of the Food Price Index.
This year's lockdown should provide accurate information on food prices at supermarkets and other food retailers – but the data collection from takeaways and restaurants will still be constrained.
