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Speaker 1: More good news for the economy. So we got supermarkets.

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Speaker 1: They've seen the lowest increase in supply costs since twenty one.

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Speaker 1: This is the Grocery Supplier Index. Supplies charged on average

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Speaker 1: one point eight percent more on the year to February,

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Speaker 1: so that's not a bad number. That's the first time

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Speaker 1: we've seen anything below two percent since July of twenty one.

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Speaker 1: In for metrics principle, economist Brad Olsen's with us. Brad,

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Speaker 1: very good morning to you.

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Speaker 2: Good morning.

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Speaker 1: Have we settled into a stable period here?

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Speaker 2: I don't know if we'd yet call it stable only

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Speaker 2: because the last couple of months the annual increase has

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Speaker 2: been slightly above two percent, so there's still a little

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Speaker 2: bit of volatility, but it's volatile around two percent. So

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Speaker 2: that's a lot more encouraging that, you know, either side

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Speaker 2: of that two percent line, it does look like those

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Speaker 2: supply cost increases are at a more sensible level when

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Speaker 2: certainly in line with where things have been in the

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Speaker 2: back before inflation rarely got rip roaring. Those supply costs

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Speaker 2: are still increasing, they're just a lot slower, and I

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Speaker 2: think that is generally helpful when it comes to that

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Speaker 2: price stability probably most importantly as well, we we are

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Speaker 2: still seeing that the likes of produce costs are showing

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Speaker 2: a bit more of their normal seasonality. You know, when

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Speaker 2: there has been a good growing season, there's more supply

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Speaker 2: on the market. That generally means that costs aren't quite

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Speaker 2: as high. On farm, costs have continued to come back.

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Speaker 2: So all of that is encouraging news. It's not perfect,

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Speaker 2: but it's in a much better position.

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Speaker 1: And can we explain, like dairy will be up because

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Speaker 1: we're selling more at higher prices, chocolate, coffee, we know

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Speaker 1: the story with climate, et cetera. Can we explain all

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Speaker 1: of this or we're not there yet either.

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Speaker 2: A lot of things. I think we can. We do

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Speaker 2: have a fairly good understanding of why they're going up.

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Speaker 2: And I think what the difference is is go back

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Speaker 2: a couple of years and just that everything was increasing.

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Speaker 2: It's sort of a fairly similar but rapid clip. Now

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Speaker 2: you've got a few more specific items that are increasing

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Speaker 2: by often quite large magnitudes, but they are often driven

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Speaker 2: by global supply things, So you know, you note the

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Speaker 2: likes of dairy. We saw again this month that the

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Speaker 2: likes of butter was a key driver but also so

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Speaker 2: rising beef prices globally means that you know, there's a

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Speaker 2: bit more pressure on what you pay for beef in

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Speaker 2: the soupermarkets locally. But and I think this is where

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Speaker 2: it got interesting. You know, the likes of coffee and

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Speaker 2: chocolate we had, you know, we've got good explanations we've

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Speaker 2: seen that supply globally has been restricted. But a few

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Speaker 2: more items as well that we just keep our eyes

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Speaker 2: on a bit more cautiously, the likes of noodle, spaghetti,

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Speaker 2: baked beans. Those are not generally quite as inflationary, and

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Speaker 2: so the fact that there's been an increase, we just go, look,

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Speaker 2: there's obviously still a bit of pressure in the system.

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Speaker 2: It's in a better position, but we haven't taken our

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Speaker 2: eye off the ball yet.

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Speaker 1: Those two and a half thousand products have increased in cost.

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Speaker 2: Is that normal?

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Speaker 1: A lot?

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Speaker 2: Not many. It's sort of in a lower position for

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Speaker 2: what a February has been the last couple of years.

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Speaker 2: I think, you know, the reference point is twenty twenty

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Speaker 2: one at the moment. That's when things are a bit

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Speaker 2: more normal, bit more stable. So the number of increasing

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Speaker 2: items isn't nearly as bad as it has been the

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Speaker 2: last couple of years. It's still afo. It was back

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Speaker 2: twenty nineteen, twenty twenty sort of thing. But again I

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Speaker 2: think that's where we're trying to find this new normal.

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Speaker 2: We're not going back to twenty nineteen, but also we're

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Speaker 2: not staying stuck in twenty twenty two. So sort of

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Speaker 2: back in the right realm, I think is the position.

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Speaker 2: We'd say it.

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Speaker 1: Is always a pleasure. Bradley go Well Brad do Wlson

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Speaker 1: in for Metrics Principal Economists. For more from the Mic

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Speaker 1: Asking Breakfast, listen live to news talks it'd be from

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