Grocery prices sky-high
ONSUMERS are facing rising prices of basic foodstuffs, not to mention home essentials like detergents and toiletries which leaves little, if any, room in the budget for luxuries that have also hit new highs in recent months.
Essential items like toothpaste and fruit salts in the toiletry department of supermarkets seem to have risen sharply, with the former hitting highs now well over the R10 mark, while little luxuries like sugar, tea, coffee, cocoa, Milo and hot chocolate have also climbed, leaving consumers searching supermarket shelves for cheaper alternatives.
The price of potato chips and chocolate is also rising and so is the tendency of retailers to push bulk sales of these luxuries at slightly lower prices, when really consumers would prefer a lower per unit price.
But the good news is that while prices are presently high, the outlook for inflation on these mostly imported luxuries is expected to be moderate.
A snap price survey at re t a i l e r s Checkers and Pick n Pay revealed that prices of a basic 100ml tube of toothpaste ranged from R10.99 for Aquafresh Mild and Minty at Checkers to R19.99 for Mentadent P Protection or Micro Granules at both stores.
A 75ml tube of Colgate Original and Close Up Cool Breeze are now R12.99 at Checkers.
Interestingly, the Colgate on our shelves is made in China and India, while Mentadent P is imported from Vietnam.
The price of a 200g tub of Eno at Checkers is now R64.99, while the same tub at Pick n Pay is R72.99.
Simba Lay’s 125g packet of chips were selling for R17.99 at Checkers and Pick n Pay, with both retailers having run bulk buy specials on this product.
Pick n Pay much earlier this year moved stock at R30 for three packets and Checkers now offers two packets for R30.
At Checkers, Nestle’s 500g hot chocolate and Milo has hit R58.99 and R51.99 respectively, while a 200g bottle of Nescafe Classic is priced at R75.99.
Cadbury’s Cocoa (250g) is priced at R53.99, while a 2.5kg bag of white sugar pushes towards the R40 mark at R39.99.
Five Roses tea is also putting pressure on budgets at R38.99 for 102 tea bags.
And the rising price of chocolates is a good motivation to diet and save.
A 150g slab of Cadbury’s Bubbly is priced at R27.99, while the shrinkflation impacted 80g slab – once a 100g slab – will set you back R13.99 at Checkers.
Nestle’s 85g Aero is now priced at R16.99 and Beacon’s 80g slabs are R14.99.
SA National Consumer Union vice chairperson Johnston said a quick survey among consumers had indicated substantial increases in the price of liquid soap for washing machines, fabric softener, dishwashing liquid, dishwasher powder and tablets, toothpaste, air fresheners, floor cleaning products, breakfast cereals and oats, toilet paper, cheese spread, Bovril, frozen vegetables, instant coffee (both local and imported), tea, prime beef, lamb cuts and chocolate.
“Overall, consumers are buying more sparingly, shopping around and wasting less,” Johnston said.
Trend
“There is a rising trend towards advertising bundled specials, where two or more different items are offered together at what appears to be a good price,” said Johnson.
This is often done to disguise a price increase in one of the items by combining it with a cheaper product.
Consumers should be cautious about such offers and always check the bundled price against the prices of the individual items, said Johnson.
Johnson added that bundles could also encourage consumers to purchase more of some items than they really needed, which could lead to wastage, especially of perishables.
I have certainly made this mistake, especially when it has come to wheat-based breakfast cereals.
“Always do the sums and, if necessary, use a calculator, which can be found on all cellphones,” Johnson said.
But what is driving these price hikes?
Both Pick n Pay and Shoprite Checkers, as well as other manufacturers contacted for comment, did not respond to specific questions about the price increases, but issued general statements.
Pick n Pay spokesperson Tamra Capstick-Dale said the retailer was “doing everything we can for our customers in these challenging times”.
“We’ve invested R500 million in price cuts and are working hard to keep price increases from suppliers as low as we can.
“Customers are enjoying our No Name and Pn P branded goods, which offer excellent value for money, and they are using their Smart Shopper personal vouchers and Brandmatch to stretch their rands even further,” Capstick-Dale said.
The Shoprite Group said in a statement that it presented customers with “innovative and value-added promotions” in its “unwavering commitment to deliver the lowest prices on food and household essentials”.
“The Shoprite Group’s promise of offering low prices to consumers every day is central to its core business. The group uses its scale and bulk buying power to keep prices consistently low for consumers, even when food prices increase.
“The supermarket group is always looking for opportunities to pass savings onto its customers, such as its regular subsidies on basic food items,” the retailer said.
The supermarket added that it had “subsidised” a 600g loaf of bread priced at R4.99 and introduced nutritious “discounted convenient meals” for R5 or less.
“The Shoprite Group also absorbs some of the costs from suppliers and offers increased promotional activity, with deep cuts on more and more lines,” the retailer said.
Sibonile Dube, the corporate affairs director for Unilever, which manufactures Mentadent P, Close-Up, dishwashing liquids and detergents, said prices consumers paid for its products were set by retailers.
Standard Bank economist Siphamandla Mkhwanazi said South Africa was a net importer of many of these luxuries, which impacted on prices.
“South Africa is Africa’s leading chocolate importer. Therefore, currency fluctuations partly influence the retail prices.
“South Africa went through a period of currency weakness, and this usually takes about three months to filter into retail prices. It may take another three months before we see the benefits of the recent rand strength on these products,” Mkhwanazi said.
“South Africa has been a net importer of sugar since the 2015/16 drought, which had a severe impact on sugar cane production.
“Domestic sugar production hasn’t fully recovered and it may take another two years before we return to full production,” he said.
Prices
Mkhwanazi said global supply and demand factors could be driving cocoa prices.
“West African countries, the main exporters of cocoa into South Africa, are currently looking good from a weather perspective.
“Going forward, that should limit growth in the price of cocoa coming into the country, assuming that the rand remains on the stronger side,” he said.
Mkhwanazi added that to the extent that SA’s international credit rating as junk status resulted in a weaker currency, it would have indirect upward pressure on prices of these groceries.
“It is important to note, however, that exchange rate pass through has been low, given that domestic consumer demand has been weak. This has limited the retailers’ ability to fully pass on the cost to the consumer.
“The recent rand strength, if sustained, should help moderate price inflation of these products going forward.
“The moderation will also be helped by the dissipating tail end effect of the recent drought.”