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SA consumers warned to shop with extreme caution

| Economic factors

Consumers should always shop with extreme caution, Vicci Baker, founder of the price comparison website Retail Price Watch, told Fin24 .

She was reacting to recent statements by Shoprite Group CEO Whitey Basson, who cautioned consumers against what he termed stores pushing unnecessary price increases“fuelled by the frenzy emanating from recent reports about spiralling costs”.

Consumer Price Inflation decelerated from 7% year-on-year (y/y) in February to 6.3% in March, while food costs in March were nearly 10% higher than in March 2015, according to Statistics SA. On average, prices increased by 0.8% between February 2016 and March 2016.

Basson emphasised that “there are still affordable food options available in the short term to help budgets go further”.

Retail Price Watch therefore decided to examine prices to see whether Shoprite Checkers was living up to Basson’s promises to consumers about fighting inflation, said Baker.

“With some notable exceptions, Shoprite Checkers does seem to have held prices of the mentioned items at rates below current inflation figures.”

Baker added that, in her view, Shoprite’s inflation beating promises mostly apply to own house brands and food items which have seen a sharp decline in wholesale prices.

Basson said on April 25 that Shoprite had “locked the price of brown bread at R4.99”, for example. Baker, however, claims that although Basson made the promise, this particular 600g loaf of bread bread only comes onto most store shelves at 10:00 in the morning and “is gone by lunchtime”. She believes the consumer who gets it “is in a lucky jackpot” and it “has done nothing to influence the price of bread overall”.

Shoprite, on the other hand, told Fin24 that Baker’s view on bread sales does not reflect the current trend observed in its business, namely 107% growth in brown bread sales. Shoprite also pointed out that bread is baked throughout the day in its stores to satisfy consumer needs.

Baker’s website has found that 1.5kg County Fair Mixed Chicken Portions has remained at R39.99 in Shoprite and Checkers since January, and 2kg of Goldi mixed portions increased by only 1.6% from an average of R49.59 to R50.39 in April.

One kilogram of bulk pork chops has, however, gone up by 15% from January, from R49.99 to an average R57.99, but a bulk pork pack, which was R51.19 per kg in January, averaged R51.65 in April.

“Basson did manage to hold the prices of his 410g House Brand cream style sweetcorn, which showed an average 2% decline from R9.99 to R9.74, but a 320g can of Koo sweetcorn and peas increased by 4.6% January to April, and a 410g of Rhodes cream style sweetcorn increased by a whopping 17.5%, from an average R10.32 to R12.12,” said Baker.

“250g of McCain garden peas declined in price January to April by 5% from R9.23 average to R8.77, while 1kg of Harvestime mixed vegetables declined sharply by 15% from R30.65 to R25.99, although this item’s price jumped again in May.”

Baker also found that, while a 1 litre sixpack of house brand UHT milk increased by less than 1%, from R61.87 to R62.39 January to April, Everfresh jumped by 7% from R72.87 to R77.99, and Clover by 5.5% from R75.66 to R79.85.

At Shoprite, White Star Super Maize Meal 2.5kg rose by 25.7% y/y to end April. Imbo Samp and Beans 500g increased by 24.7% over the same period. Lion Lentils 500g has gone up by 60% y/y and by more than 50% since January alone in Shoprite Checkers stores.

Baker said consumers should keep in mind her belief that retailers often introduce price increases elsewhere in the store for every ‘special’ announced.


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