A report in the Sunday Times reveals how much more South Africans are now paying for food from leading retailers.
Professor Carel van Aardt, head of household wealth research at Unisa’s Bureau of Market Research, told the paper that food prices have increased 12.5% in the past year – well above the 6.3% inflation rate.
Between May 2015 and May this year, van Aardt said that the biggest price increases were for vegetables (22.8%), oils and fats (21.5%), breads and cereals (21.5%), fruits (13%), dairy (6.5%) and meat (6.3%).
Food prices in the country have been adversely affected by the weakening economy, a volatile rand, and a well documented drought.
Standard Bank said in May that food price inflation is expected to hit an average of 10.2% in 2016, peaking at 12% – however, economists are more pessimistic, expecting food inflation to peak at 16.%%
A Sunday Times shopping survey compared current prices at four leading supermarkets for a basket of basic foodstuffs with the cost from two years ago.
It found that at three of the supermarkets, the basket now costs between 22% and 26% more. Spar, the paper said, was an exception, keeping its basket increase to just under 10%.
Woolworths said in a statement: ”Circumstances outside our control have an impact on prices. We will only accept price adjustments as a last resort after exploring all avenues to prevent one. We are focused on ensuring that we provide value for our customers, especially in tough economic times.”
Pick n Pay said: “Where prices have gone up, it has usually been as a result of the drought and its impact on food production. For example, the poor wheat harvest, combined with a weak rand and higher tariffs on imports, has unfortunately meant increases in the price of maize and flour.”
The Shoprite Group told the Sunday Times that it took a tough stance in negotiations with suppliers.
Shoprite CEO Whitey Basson recently said that that retailers should not use the drought as an excuse to unnecessarily raise prices.
Many consumers and consumer groups however, have raised concern over rising food prices.
The South African Food Sovereignty Campaign and the Consumer Action Network recently accused food manufacturers and retailers of artificially inflating the price of bread in the country.
According to the groups, food manufacturers are using the drought and subsequent imports of wheat to raise the price of bread – despite farmer association, Grain SA, saying that the price should not be affected by these things.
Over the past year, the price of bread across several brands has increased substantially – but Grain SA noted that there was no price decrease when international wheat prices were lower.
Viccy Baker from the independent consumer price comparison website, Retail Price Watch, said that pricing of household goods in supermarkets needs to be subject to closer scrutiny.
Baker believes that consumers are being conditioned in advance to accept higher prices because of the drought, transport costs and electricity prices, for example.
“While price increases are inevitable, certain stores are taking advantage of consumers by pricing goods at over 50% more than they were a few months ago, pricing which surely cannot be justified under any conditions,” Baker said.