Basket case: supermarkets cashing in on our want

FOOD prices are rocketing way beyond consumer price index inflation, a Sunday Times shopping survey has confirmed.

We compared today’s prices at four leading supermarkets for a basket of basic foodstuffs with the cost of the same basket two years ago.

The result was scary: at three of them, the basket now costs between 22% and 26% more. Spar was an exception, keeping its basket increase to just under 10%. Retailers said they were committed to giving shoppers the best possible deal — but a food industry analyst claimed profit margins were their overriding priority. Woolworths promised to defend consumers’ wallets wherever possible.

‘‘Circumstances outside our control have an impact on prices,” a statement said. “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.”

David North, group executive for strategy and communications at Pick n Pay, said the chain was working with suppliers to reduce costs. “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 said it took a tough stance in negotiations with suppliers.

But Tracy Ledger, a food and agriculture researcher, said supermarkets pressing suppliers to cut prices contributed to food insecurity. “One of the hungriest groups in South Africa are farm workers. And this is the result of supermarkets putting so much pressure on farmers — and that’s what keeps small farmers out of the market.”

Ledger said lower prices paid by retailers to farmers were not immediately passed on to consumers. “If they were, we wouldn’t have a situation where the supermarket chains are making billions in profits.

“The main reason for cutting prices paid to farmers is not to be altruistic towards consumers — it’s to protect their margins. Without a doubt the priority of supermarket chains is to protect their shareholders and management bonus pool. It’s not whether or not the average family in South Africa can feed themselves,” said Ledger.