Prime Minister Jacinda Ardern says the changes the Government has made to try to bring food prices down will work but warned, "it will take time".
Statistics NZ's food price index released last week showed food prices increased by 8.3 percent in the year to August - the most in 13 years.
The index was also 1.1 percent higher (0.9 pct after seasonal adjustment) last month than in July.
The Government has rolled out a suite of support packages for Kiwis to help tackle the rising costs amid the cost of living crisis including the $350 cost of living payment, the delivery of which was widely criticised, as well as fuel tax cuts and half-price public transport fares.
Ardern told AM on Monday the escalating prices come down to global factors and the makeup of the supermarket industry.
"Food prices for us, there are two things at play here. One is the inflationary impacts that we're seeing around the world, that's where things like the cost of living payment are designed to help ease that and we have another cost of living payment still due," Ardern told AM co-host Melissa Chan-Green from London.
"The second thing that we know is an issue in New Zealand is just the makeup of our supermarkets and the fact that we don't have wide-ranging competition relative to other countries. So we are making moves there."
When questioned by Chan-Green about the changes being made in the last few months and the lack of impact seen by consumers, Ardern was quick to defend the new implementations.
"I guess for those individual households that are receiving the cost of living payment, look, there's no suggestion here that it will resolve everything," she said.
"But alongside initiatives like food and schools, taking off $0.25 a litre excise at the pump, the cost of living payment, they're all designed to help ease the pressure through this period which is expected to improve as the months pass."
The Government has announced major changes to the supermarket industry this year to help encourage more retailers to enter the market.
It comes after the Commerce Commission's market study into New Zealand supermarkets, found they earn $1 million a day in excess profits.
The Commission made 14 recommendations, including introducing a mandatory code of conduct to establish an industry regulator and ensuring loyalty programmes are easy to understand and transparent. The Government accepted 12 of the recommendations and said it is taking stronger action on the other two.
Ardern said the changes will make a difference but warned it's "going to take a bit of time".
"On food prices, what we're doing at the moment hasn't been done before. We are changing up the market, the playing field for those who are operating as supermarket retailers, making it easier for people to enter," she said.
"That should make a significant difference. But it is going to take a bit of time."
Watch the full interview with Jacinda Ardern above.
