Inflation eases but consumers still face high food prices: ABS

Shoppers are still contending with food price spikes despite an easing of overall inflation in the economy, according to the latest quarterly Consumer Price Index data from the Australian Bureau of Statistics. The September 2024 quarter data, released on October 30, revealed the annual rate of food price inflation has remained at the same rate of 3.3 per cent since the June quarter. Prices in the ‘food and non-alcoholic beverages’ category rose 0.6 per cent quarter-on-quarter. RaboResearch senior food retail analyst Michael Harvey said there was an 8.6 per cent spike in the annual price inflation for fresh produce. “For the September 2024 quarter though, the ABS does cite higher prices for berries, grapes, tomatoes and capsicum contributing to the rate of inflation in this category due to unfavourable growing conditions,” he said. “However, with the summer season now approaching, we are starting to see good volumes and lower prices in some fruit and vegetable products.” Mr Harvey said there was some positives for consumers regarding food prices, including a general moderation in inflation across many key categories such as condiments, breads and spread. “For dairy, there has been promotional activity in the cheese category which has been a driver in some of the lower pricing seen here,” he said. “And it is expected lower retail milk prices we have seen on some supermarket shelves in recent weeks will come through in the December quarter CPI data.” However, the data showed consumers were still paying high prices for butter. Mr Harvey said there were some other “problematic categories” that were worth addressing in the report, such as snacks, confectionary and cooking oils, which were a “clear red flag” for consumers. “While this is a lower rate of inflation than seen in the previous quarter, it follows on from two years of high inflation in this category – on a cumulative basis, quarterly price inflation is running at +42 per cent since March 2022,” he said. “This reflects the impact of global supply shocks in cooking oil.” Snacks and confectionary have undergone an annual price rise of just over five per cent in the September quarter compared with 4.6 per cent in the June quarter, which Mr Harvey said was a result of higher global cocoa bean prices. “And with all these categories — cooking oil, snacks and confectionery and eggs — consumers have been seeing prices rise since 2022,” he said. Mr Harvey said the cost of the average food basket for Australian households was “still very high and likely to remain high in the near term”. “Consumers are continuing to respond with their food purchasing choices. There is a big focus on promotion and activity to cater to the value-conscious consumer.”