• The Grocery Supplier Cost Index was up 2% in the 12 months to April.
• On a monthly basis, just over 2600 products increased in cost in April.
• Rising butter costs helped drive a 3.8% increase in costs in the chilled foods category.

Butter, beef and chocolate were among the grocery products with the largest annual price increases in April, according to the Grocery Supplier Cost Index (GSCI).

Commissioned by Infometrics and Foodstuffs New Zealand, the GSCI showed the pace of supplier cost increases to Foodstuffs supermarkets (New World, Pak’nSave and Four Square) rose 2% in the year to April.

“This increase is the same as the result recorded in March, and is in line with expectations of broadly more settled cost trends – at least compared to recent years,” Infometrics chief executive and principal economist Brad Olsen said.

But Olsen said a number of key products continue to see higher supplier costs, driven by offshore demand and supply trends.

“Costs for domestically produced dairy and meat are being lifted by strong international demand, which are raising export prices and influencing local prices too,” he said.

Rising butter costs also helped drive a 3.8% increase in costs in the chilled foods category.

Olsen said higher international dairy prices had raised domestic costs too.

The price of a 500g block of butter at supermarkets recently spiked over $10. Prices have risen by as much as $3 since January.

Coffee and chocolate costs remain higher due to global supply trends, Olsen said.

On a monthly basis, just over 2600 products increased in cost in April compared with March.

“This monthly increase is broadly in line with the 12-month moving average, of 2700 a month,” Olsen said.

“The number of monthly cost increases has been bouncing around recently, with a lower number at the start of the year and a larger month of increases in March.

“There are still a number of higher cost increases showing through, with 3.4% of cost changes in April being of the larger 40-80% magnitude,” Olsen said.

“At present, costs are expected to increase at a higher rate than prices, but with a number of key products still rising in cost, most notably butter, the increases are set to be more noticeable.”