Feeling the Pinch? How Rising Inflation is Affecting Your Kiwi Business and Your Family Finances.

You might have noticed a bit more of a squeeze when you're paying for things lately, whether it's at the checkout or when you're looking at the business accounts. It's a conversation that seems to be everywhere, from the radio on the way to work to discussions over the fence with the neighbours: the rising cost of, well, just about everything. And it's not just a fleeting concern; it's a genuine shift that's impacting us all, both in our homes and in the businesses that form the backbone of our communities.

Just this week, we saw the latest figures highlighting the continued upward pressure on prices. Take food prices, for instance. Stats NZ reported a significant 3.5% jump in the year to mid-April 2025[^1]. That's a noticeable increase when you're doing the weekly grocery shop for your whānau, isn't it? But this isn't just about the cost of your kai; these broader inflationary pressures are rippling through the entire economy, impacting our businesses in profound ways too.

For our business owners out there, you're likely feeling this squeeze from multiple angles. The increased cost of raw materials, shipping, and even just keeping the lights on is becoming a significant challenge. That 3.5% rise in food prices? It's a stark reminder that the cost of everything, from the ingredients in your café's menu to the supplies for your manufacturing plant, is likely going up.

And let's not forget the recent minimum wage increase on April 1st. While a positive step for many workers, it adds another layer of cost for businesses to navigate. Balancing fair wages with maintaining profitability in an inflationary environment is a tightrope walk many of you are currently undertaking.

As homeowners, we're all too familiar with the rising cost of living. Higher mortgage rates, driven in part by efforts to curb inflation, are putting pressure on household budgets. That extra few dollars at the supermarket, coupled with increased petrol prices and utility bills, means we're all having to be a bit more mindful with our spending.

The connection between these two – our household finances and the health of our businesses – is tighter than you might think. When household budgets are stretched, consumers naturally become more cautious with their spending. This can lead to reduced demand for goods and services, putting further pressure on businesses already grappling with higher operating costs. It's a bit of a domino effect, isn't it?

So, what can we do? While the big macroeconomic levers are often out of our direct control, understanding the landscape is the first step. For businesses, now is the time to really scrutinise your cost structures. Are there efficiencies to be found? Can you negotiate better terms with suppliers? How can you adapt your pricing strategy to reflect increased costs while remaining competitive and retaining your loyal customers?

For homeowners, it's about smart budgeting and making informed purchasing decisions. Exploring ways to reduce energy consumption, comparing prices, and perhaps delaying non-essential purchases can help navigate these times.

The current inflationary period presents a dual challenge for us here in Aotearoa. As business owners, we need to be agile and strategic to maintain viability. As homeowners, we need to be savvy and adaptable to manage our household finances. By understanding the interconnected nature of these pressures, and by sharing knowledge and support within our communities, we can navigate these blustery economic winds together.

You can read more about the rising effects of inflation on Kiwi's here.