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

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.

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%.