As South Africans face rising food prices despite low levels of headline inflation, the latest BusinessTech shopping price comparison among the biggest retailers in the country shows that their price-containment measures appear to be working.
Several research groups have conducted shopping basket comparisons, highlighting how food prices in particular have increased over the last year.
This includes baskets like the PMBEJD, which found that foods most selected by low-income households have increased by almost 5% in the last seven months, and the National Agricultural Marketing Council’s Food Price Monitor, which found that inflation on a basic urban food basket is at 9.8%.
The BusinessTech food basket – which we have been tracking over the last six years – tells a different story, however, revealing a drop in prices from last year.
The basket is a simpler selection of ‘everyday’ items that middle class families would buy, and isn’t necessarily used to track inflation on a wide scale, but rather to assess the price differences between major retailers, and the impact their ‘house brands’ can make to the total bill.
The 2020 basket price also saw some sharp increases due to lockdown, following the outbreak of the Covid-19 pandemic, something which was also seen in the other basket research. We last tracked food prices in September 2020 – after the worst of lockdown – hoping to catch prices in a more settled state.
Prices in April 2021 are around 3.6% lower from seven months ago (around R12 cheaper), with all retailers measured in the price war showing a drop.
This result would be in line with stated goals from the likes of Checkers, Woolworths and Pick n Pay to try and contain increases, and invest in keeping prices as low as possible to assist struggling consumers.
This does not mean that food prices are not increasing, however, as many items not tracked in our basket have seen hikes, including meat products, beans, soups, spreads and other fruits.
Retailers compared
Among South Africa’s major retailers, Woolworths Food still remains the most costly option for shoppers – however, it doesn’t carry the highest prices across the board.
Pick n Pay, which is competing in a dual market (both premium and cost-saving) came in with the second highest-priced basket, largely due to the price of house brand rice and tea relative to its competitors.
Following feedback from Pick n Pay in 2019, our price war now includes a second measure for the group, substituting PnP branded items with the group’s more affordable No Name Brand items, where applicable.
Pick n Pay is the only retailer to have two ‘house’ brands, with the group saying that its PnP brand offers a more premium alternative to No Name Brand, which targets affordability.
While No Name Brand makes available a host of cheaper products, only two items are applicable for substitutes in the BusinessTech basket – rice and tea. Substituting these for No Name brands makes the basket almost 10% cheaper than the PnP premium basket, overall.
These substitutions also make the No Name basket compare far more favourably with the Checkers basket, which is only R1.10 cheaper. The Checkers basket remains the most affordable, overall.
Spar, as in previous years, sits in the middle of the competition. Of note is that Spar is franchised, and prices and items can vary from store to store. For example, a 2kg bag of house brand parboiled rice ranges between R26.99 and R31.99 in price, depending on the store. Our local store had it at R28.99.
Woolworths remains the most expensive basket, but added a new one-cup black tea product at R26.99. This has replaced the extra-strong black tea (R49.99) in our basket, bringing the overall price down.
Comparing basket prices from 2020 to 2021, all the stores have seen a drop in the overall basket price, with Woolworths seeing the biggest drop overall, due to the new tea product.
- Woolworths: -6.0%
- Spar: -4.5%
- PnP No Name: -3.3%
- Pick n Pay: -2.2%
- Checkers: -1.4%
Overall, you would pay 42% more for the average BusinessTech basket, compared to six years ago.
Methodology
The BusinessTech basket comprises 12 common food items that would be found in a middle class family shopping basket. It does not include items where prices are sold on a per kg basis (like meat, or cheese), to draw as fair a comparison as possible.
Prices were sourced in-store from stores around Centurion and cross-checked online, where applicable.
In all cases, house brands were used where applicable. In the case where no house brand is available, the cheapest alternative is sources. House brands were selected for bread, maize (except Checkers), milk, rice, sugar and tea.
Promotional prices, where marked, were not taken into account. Woolworths’ self-raising flour price was determined on a per kg basis. In-store prices are subject to change depending on individual regions and promotions.
Read: Food prices in South Africa are up in recent months – here’s what you are paying more for
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