Inflation ticks higher – bad news for eating out in South Africa

Consumer Price Inflation (CPI) has ticked up at the start of 2024, but softening food prices provide some relief for cash-strapped consumers.

Stats SA said that CPI increased from 5.1% in December to 5.3% in January – in line with market expectations.

The monthly change in CPI was 0.1% in January.

The categories with the largest annual price increases were restaurants & hotels at 8.0%, food & non-alcoholic beverages (NAB) at 7.2%, and health at 6.5%.

Although there was a monthly decline of 5.2% in fuel prices, this was not enough to subdue the annual rate for fuel, which increased from -2.5% in December to 3.3% in January.

This led to a sharp rise in annual transport inflation from 2.6% in December to 4.6% in January.

Inflation for several other transport categories also cooled in January, as the end of the festive decreased public transport tariffs decreased by 2.0%, dragged down by monthly price decreases for long-distance busses (down 21.2%), car rental (down 12.1%) and airfares (down 4.1%).

Wine and Dine pain

Prices for the restaurants and hotels group increased by 8.0% in the year to January, up from December’s print of 7.0%.

Restuarant-related product groups that saw high annual increases included fish & seafood products (up 9.9%), red meat-based products (up 9.7%) and hamburgers (up 8.6%).

After a jump in the festive season, hotel room rates dropped by 2.1% on a month-to-month basis. Despite this decrease, hotel room prices still increased by 10.7% on a year-to-year basis.

Food inflation cools

Annual inflation for food and non-alcoholic beverages decreased from 8.5% in December to 7.2% in January, with all sub-categories, except for sugar, sweets & desserts, oils & fats, and cold beverages, seeing a decline.

The annual rate for sugar, sweets & desserts increased from 17.9% in December to 18.5% in January, with the annual increase in white sugar (20.1% in December to 21.2% in January) driving the upward momentum.

Prices at factories were also elevated, with the December producer price index (PPI) showing sugar inflation at 23.5%, with raw cane sugar growing by 36.7% and refined sugar by 18.8% over the last year.

Annual inflation for bread & cereal products reduced from 7.5% in December to 6.5% in January, while meat inflation also softened from 3.9% to 2.2%.

Other changes

Other notable changes included the annual inflation for miscellaneous goods and services, which ticked up from 5.1% in December to 5.4% in January.

Increasing bank fees led to a 5.5% annual rise in financial services.

On the other hand, prices for personal care items decreased from 10.3% in December to 9.5% in January.

The image below shows the products that recorded the most significant annual and monthly price increases:

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