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Price war 2018: Woolworths vs Pick n Pay vs Spar vs Checkers

| Economic factors

From the start of April, the VAT has increased to 15%, impacting not only on shelf prices, but every step along the value chain in bringing goods to your favourite store.

One of the biggest questions on consumers’ minds is how this will affect what you pay at the tills.

While the VAT hike means that prices have gone up, there are a few exceptions. Zero-rated items have not seen any price adjustments, as VAT is not applied, while certain items have risen sharply, due to other taxes having an effect.

These taxes include (but are not limited to) the fuel levies – where freight costs may be passed on to consumers – as well as the ‘health promotion’ levy, which for now is only the sugar tax.

BusinessTech looks at how South Africa’s major retailers have adjusted their prices on the same basket of goods, showing exactly how things have changed, and who comes out as the most affordable overall.

For our basket, we look at some essential and non-essential food products. The basket contains 12 items, with store-brands priced for each item where available.

From the four major retail outlets we looked at, only Pick n Pay had adjusted its prices in-line with the VAT hike from 1 April, with Checkers, Woolworths Food and Spar stores showing product prices unchanged.

The prices were checked at various outlets in and around Centurion, and cross-referenced online where possible.

The table below shows how Pick n Pay’s prices in the BusinessTech food basket changed from 14% to 15% VAT:

Pick n Pay VAT hike

ProductDescriptionMarch 2018April 2018Change
Apples 1.5kg R23.99 R23.99
Bread Brown, one loaf R7.99 R7.99
Cabbage One head R13.99 R13.99
Coca Cola 2 litres R15.99 R16.79 5.0%
Eggs 6 extra-large R19.95 R19.95
Flour Self-raising, 2.5kg R38.99 R39.33 0.9%
Maize Ace, 2.5kg R24.99 R24.99
Margarine Rama, 500g R26.22 R26.45 0.9%
Milk Full cream, 2 litres R24.99 R24.99
Rice White, 2kg R20.99 R20.99
Sugar White, 2.5kg R35.79 R36.10 0.9%
Tea 100 bags R32.99 R33.28 0.9%
Total   R286.87 R288.84 0.7%

Of the 12 items in the basket, seven are zero-rated for VAT. Zero-rated items include fruit and vegetables, rice, maize, eggs, milk and brown bread.

The biggest jump in prices was seen in the price of a 2 litre bottle of Coca Cola, which was subject to both the VAT hike and the new sugar tax.

The coke price increased 5%, from R15.99 to R16.79. Meanwhile, the price increases from VAT translated to a 1% hike for all other products.

Purchasing the same basket of goods before and after the VAT hike would have seen a consumer pay just under R2 more at the till (0.7%).

Price war: Woolworths vs Pick n Pay vs Spar vs Checkers

Based on the in-store prices of products as at 2 April 2018 (post VAT hike), this is how the retailers compared.

The comparison shows that Checkers is still the cheapest option for this particular basket of goods, while Woolworths has maintained its spot as the most expensive.

ProductDescriptionWoolworthsSparPick n PayCheckers
Apples 1.5kg R24.99 R26.99 R23.99 R22.99
Bread Brown, one loaf R13.99 R8.99 R7.99 R8.99
Cabbage One head R15.99 R12.99 R13.99 R11.99
Coca Cola 2 litres R16.99 R15.99 R16.79 R16.99
Eggs 6 extra-large R27.99 R14.49 R19.95 R19.99
Flour Snowflake, S/R, 2.5kg R39.99 R43.49 R39.33 R32.99
Maize Ace, 2.5kg R23.99 R19.99 R24.99 R19.99
Margarine Rama, low fat, 500g R25.99 R27.99 R26.45 R25.99
Milk Full cream, 2 litres R29.95 R26.99 R24.99 R24.79
Rice White, 2kg R25.99 R28.15 R20.99 R18.99
Sugar White, 2.5kg R38.99 R34.49 R36.10 R36.99
Tea 100 bags R35.29 R36.99 R33.28 R16.99
Total   R320.14 R297.54 R288.84 R257.68

Prices were sourced in-store from stores around Centurion and cross-checked online, where applicable.Promotional prices, where marked, were not taken into account. Woolworths self-raising flour prices were determined on a per kg basis. In-store prices are subject to change depending on individual regions and promotions.

The graph below outlines how this basket has changed over time, including the results from the 2015 price war.

Despite being the highest price, Woolworths showed the lowest increase between 2017 and 2018, with the basket price only going up 3.6%.

Spar’s prices saw the biggest hike, up 7.9%, while Pick n Pay and Checkers’ prices both increased by around 5.6%.

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