The Reserve Bank governor spent this week warning businesses against passing on higher costs. On the same day, fresh data confirmed what every North Island household already knows: they're paying more for food than ever before.

The average North Island household spent $15,462 on groceries in 2024. That's up from $15,306 the year before, and $12,590 just four years ago in 2020. (Source: Stats NZ, food-price-index-regional)

Here's the tension: the Reserve Bank wants businesses to absorb rising costs. But the food price data shows they're not absorbing anything. They're passing it straight through to shoppers, and have been for years.

Between 2020 and 2024, North Island food spending jumped 23%. That tracks almost perfectly with New Zealand's overall inflation over the same period, which hit somewhere between 20% and 25%. In real terms, North Islanders are spending roughly the same amount on food as they were four years ago. But their nominal bills have exploded.

Which brings us to the Reserve Bank's plea. When the governor warns businesses not to pass on costs, he's really asking them to accept lower profit margins. That's a hard sell when every supplier, landlord, and utility company is already squeezing from the other direction.

The contrast is stark. RNZ reports that soaring bills are putting household spending on ice. But food isn't discretionary. You can delay buying a new couch. You can't delay feeding your kids.

So while discretionary spending freezes, food bills keep climbing. The $15,462 figure is nominal, meaning it hasn't been adjusted for inflation. But that's exactly the point. Your actual grocery shop costs $15,462 now versus $12,590 four years ago. Your bank account doesn't care about real versus nominal terms.

The trajectory is relentless. Food spending rose every single year from 2020 onwards: $12,930 in 2021, $13,984 in 2022, $15,306 in 2023, and now $15,462 in 2024. The increases are getting smaller in dollar terms, but they're not stopping.

The Reserve Bank can issue all the warnings it wants. But until inflation actually falls and stays fallen, someone has to absorb those rising costs. Right now, the data is clear about who that someone is: anyone buying food in the North Island.

This is the bind New Zealand is in. Businesses say they can't absorb costs without cutting jobs or going under. Households say they can't absorb costs without cutting everything except essentials. The Reserve Bank says inflation is coming down. But your grocery bill says otherwise.