Skip to main content

Basic grocery basket up R100 since Feb - Massmart

| Economic factors

The price of a basic basket of 23 grocery items has risen by 13% since February this year, Massmart Holdings said at the announcement of its first-half results to June 26 2016.

According to an analyst presentation, a food basket containing items such as cordial, coffee creamer, pilchards, maize, salt, toilet paper, sugar, soap, spaghetti and rice now costs R100 more since February – up R874 from R774. 

Staples such as maize, sugar and peanut butter had among the highest increases. 

In such a subdued economic environment consumers delay purchases, trade down and reduce spending on durable goods to support spending on semi- and non-durables. 

In addition, customers search for value by cherry-picking promotions, buying in smaller quantities and choosing no name brand products. 

Massmart said weaker economic growth and the effect of a softer rand on import prices severely impacted consumer spending on durable goods. 

However, food and liquor sales growth accelerated in line with higher inflation, but also due to “effective trading and positive price-gaps to competitors”. 

“In a defensive economic environment, food acts as buffer from the pressure on our general merchandise and home improvement categories,” the company said. 

Statistics South Africa announced the consumer price index was 6% in July, down from 6.30% in June. 

Food and non-alcoholic beverages contributed 0.1 of a percentage point in July. The index rose by 0.5% month-on-month, mainly due to a 2.7% increase in sugar, sweets and desserts, a 1.1% gain in milk, eggs and cheese and a 0.8% surge in bread and cereals. 

Pin It

Related Articles

‘Desperation is the new normal’ for South Afric...

By: Opinion – IOL Business Report South Africans have been collectively waiting with bated breath for some small financial reprieve from the relentless price hikes of the past few years that have driven them to the brink of despair, chief among t...

SA retail sales up 2.3% in March

Stats SA reports that retail trade sales increased by 2.3% year-on-year in February 2024. The largest contributor to this increase was general dealers (6.4% and contributing 2.8 percentage points).

Massive tax increases to fund NHI – destroying ...

By: Shaun Jacobs – Daily Investor Funding the government’s National Health Insurance (NHI) scheme would require a 31% increase in personal income tax, or a 6.5% increase in VAT, or a ten times increase in payroll tax, threatening South Afric...

SA consumers’ disposable income eroded by high ...

By: Given Majola - IOL Business South African consumers’ disposable income was being eroded by persistently high interest rates and inflation (especially food inflation) while a lack of any meaningful economic growth was constraining their salaries.

Nearly half of South Africans struggle to affor...

By: Xolile Mtembu - IOL South Africans spend over one-third of their income on food, and growing costs have a significant impact on their finances.