The Competition Commission's latest report on essential food prices was released this month.
Unfortunately, it does not show a great outlook for consumers in South Africa.
According to the report, "despite headline inflation reaching its lowest level since October 2021, food inflation remains at nearly double the overall inflation rate".
"The commission therefore continues to monitor essential food prices and prices throughout the value chain to see whether consumers are being harmed by the state of competition throughout food value chains."
One of the major points the report notes is that global bread and wheat prices have decreased in the first quarter of the year, but SA prices for these products have not; in fact, while global prices have gone down by around 10%, SA prices have gone up by 3%.
According to the Commission, white maize prices have decreased globally by 23%, but retail prices for maize meal have not fallen.
There is hope, though, as the commission states, "Our recent analysis shows that margins earned by bread and maize meal producers continue to grow in 2023, despite some easing cost pressures.
"For bread, falling wheat prices in the period up to April were not reflected in producer or retail prices immediately, but those prices are now starting to come down. Maize meal producers and retail prices now show evidence of the feather effect following the recent fall in white maize prices."
LOAD SHEDDING
There is unfortunately no end in sight for load shedding, and retailers are feeling it immensely. This will no doubt have an impact on the prices of goods, and consumers need to be aware of this.
The commission’s report also looked at how much retailers lost due to load shedding.
Have a look:
– Pick n Pay reported it had incurred R522 million in incremental diesel costs in the 2023 financial year.
– Shoprite’s South African Supermarkets division incurred R1.3 billion in loadshedding expenses.
– Woolworths reported that its fresh food business carried R20 million to R30 million in load shedding related food waste and diesel costs (R240–R360 million annually).
– Spar reports that retailers spent more than R700 million on diesel costs in the first six months (October 2022 to March 2023).
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