Are $7 blocks now normal? What’s going on with the price of chocolate
Consumers likely noticed a jump in the price of chocolate, particularly around Valentine’s Day. Data from Stats NZ indicates a significant increase in food costs with chocolate experiencing a particularly sharp rise.
Rising Food Costs in New Zealand
Stats NZ data reveals that food prices increased by 4.6 percent in the year leading up to January. This follows a 4 percent increase recorded in the previous 12-month period. Grocery prices specifically rose by 4 percent during this time.
Chocolate Prices Surge
The price of chocolate saw a substantial increase of 20.5 percent, reaching an average of $6.89 for a 250-gram block. This marks the first time Stats NZ data has shown the average price of 250g of chocolate exceeding $6, and it is nearing $7.
Factors Driving the Price Increases
Infometrics chief executive Brad Olsen noted that chocolate prices typically increase in January or February ahead of Valentine’s Day. However, the current 20 percent increase represents three consecutive months of double-digit annual price gains.
Olsen suggests a combination of factors are at play, including pricing changes within the market, the seasonal Valentine’s Day demand, and the impact of rising international cocoa and chocolate prices. International chocolate prices were up 37 percent compared to international cocoa prices two years prior.
Westpac senior economist Satish Ranchhod indicated that Valentine’s Day may not be the primary driver of the price change, as chocolate often experiences discounts in November and December, followed by a return to regular pricing in January and further discounts in February.
As of this week, Woolworths was selling 250g blocks of Whittaker’s chocolate for $7.49.
What Could Happen Next
If international cocoa and chocolate prices remain elevated, New Zealand consumers could continue to see higher prices at the checkout. Conversely, if international prices ease, some of those savings could eventually be passed on to consumers, though the timing of such adjustments remains uncertain. Further promotional activity by retailers could also influence prices in the short term.
Frequently Asked Questions
What other food items have seen price increases?
According to Stats NZ data, sirloin steak increased by 22.9 percent over the year, white bread by 57.9 percent, and a takeaway coffee to an average of $5.16.
Is the Valentine’s Day spike a significant factor?
Satish Ranchhod of Westpac suggests Valentine’s Day is probably not a major driver of the price change, given typical discounting patterns around Christmas and February.
How do Whittaker’s prices factor into the overall increase?
Brad Olsen of Infometrics suspects that recent price increases by Whittaker’s are filtering through into the overall chocolate price data.
How will these rising food costs impact household budgets in the coming months?