Inflation may not be the only factor increasing the price of consumer goods, especially devices, new research by PriceSpy suggests.
PriceSpy tracks the cost of goods over time, showing consumers where to get the lowest prices.
Carl Lindholm, head of public relations for PriceSpy Aotearoa, said while inflation is often blamed for increasing prices, it's not the only reason.
"We are increasingly seeing competing manufacturers up their prices at differing rates, not only to each other but in comparison to the rate of inflation," Lindholm said.
Inflation is running hot in Aotearoa at the moment. The most recent data showed it was 6.7 percent, down slightly from its peak of 7.3 percent but still much higher than the Reserve Bank's target of 1 to 3 percent.
The PriceSpy team looked into average prices across mobile phones, smartwatches, and vacuums sold by larger companies.
Lindholm said there was a difference in price increases between manufacturers with some rising in line with inflation, with others far outstripping it
For example, over the past year, the average price of mobile phones shot up 13 percent on average. But while Apple phones increased 12 percent, Samsungs only increased 7 percent.
The price of smartwatches also increased - up 16 percent on average. This was made up of a 28 percent increase for Apple and, again, a 7 percent increase Samsung.
Meanwhile, Fitbits actually dropped in price despite inflation, down 6 percent.
Technology wasn't the only everyday object increasing either. Vacuum cleaner prices rose 8 percent overall. While Dyson vacuums stayed flat, Miele vacuums rose 5 percent. But Samsung vacuums increased a startling 29 percent.
So what's behind the increases?
Lindholm said brand equity could be behind differing prices between companies selling similar products.
"Even if a manufacturer offers a very similar product for a lower price, consumers often feel more compelled to pay a premium for the brand with the strongest equity," he said.
But it’s not just the manufacturers that are doing this, according to Lindholm.
“It’s everyone in the supply chain, so shipping companies and retailers are updating their pricing strategies too.”
Tatauranga Aotearoa / Statistics NZ data shows consumer prices rose 6.7 percent on average, in the year to March. But Lindholm said the price of goods is increasing faster than inflation
“When we compare the price increases found in our research to the current annual inflation rate (6.7 percent), it’s unsurprising that many of the price increases we are witnessing are considerably higher."
As a result, Kiwis are increasingly buying cheaper alternatives.
The most-popular LEGO product this year was the LEGO Bonsai Tree (costing $78), versus last year's LEGO Star Wars Imperial Star Destroyer (costing up to $1054).
"Whilst this is quite an extreme example, it still highlights how people are adapting their purchase behaviours," Lindholm said.
Research from Sense Partners published last week claimed the opposite of the PriceSpy data.
It suggested inflated profits were not behind rising prices for goods and services in Aotearoa.
Catherine Beard, director of advocacy at Pahiki Aotearoa / Business NZ, said profits were slim.
"This report uses data from StatsNZ to show that increased profits are not driving inflation and that profits are actually leaner than they were pre-COVID."
Beard noted the kōrero about companies worldwide potentially using COVID-19 and inflation as a guise to boost prices and profits, above what consumers would reasonably expect in inflationary times.
Prisjakt (PriceSpy) launched in Sweden in 2000, and it's their most popular price comparison website.
The PriceSpy study used data from January to May in both 2022 and 2023
