Food prices in August were 5% higher than in the same month last year, data from Stats NZ has shown.
Incomes are increasing by as little as half that amount, depending on the method used to measure wage growth.
One economist said the situation adds more strain to household budgets, creating a squeeze that feels worse for some than the global financial crisis.
Simplicity chief economist Shamubeel Eaqub described it as a “slow grind” for households still waiting for relief from the economic downturn and cost of living crisis of recent years.
He said that although there were predictions the recession and recovery might resemble the global financial crisis, it has turned out to be both deeper and more prolonged.
For most households, the cost of living stayed high despite falling inflation, as prices for infrequently purchased items fell the most, while core expenses that people regularly pay remained costly.
The annual rise in food prices was mainly driven by a 4.7% increase in rates of grocery food items. This was due to the higher prices for milk, cheese, and butter.
Milk increased by 16.3%, reaching $4.72 for two litres; cheese rose 26.2% to $12.89 per kilogram block; and butter jumped 31.8% year-on-year to $8.58 per 500 grams.
The average prices quoted for milk, cheese, and butter reflect the cheapest available options for each product.
The meat, poultry, and fish group, which rose by 8.1%, was the second largest factor contributing to the annual increase in food prices.
Fruit and vegetable prices rose 8.9%, while restaurant meals and ready-to-eat foods increased by 12.4%, and non-alcoholic beverages went up 3.9%.
Eaqub said that prices are expected to keep rising, but the pace of increase is likely to slow down compared to previous rates.