The crisis eating up middle-class budgets in South Africa

 ·8 May 2024

Middle-class South Africans have seen the share of money spent on monthly food bills almost double over the last decade—with the cost of living crisis hitting poorer households even harder.

Factors such as global and domestic food prices rising faster than household incomes, a weak rand, rising costs throughout the food chain from energy to transport, unreliable electricity, and port inefficiencies mean that South Africans need to dig deeper into their pockets to purchase their groceries each month.

StatsSA estimated that, on average, households (particularly middle-income) spent between 12% and 16% of their income on household food expenses in 2014/15.

This has changed significantly since then, shooting up to 31%, going as high as 55% for lower-income homes.

The Bureau for Food and Agricultural Policy (BFAP), using the Stats SA Living Conditions Survey 2014/15 and data inflation-adjusted to Quarter 1 of 2024, said that the average share of household income allocated to food and non-alcoholic beverages for income brackets is around:

  • 35% for low-income households;
  • 17% to 31% for middle-income households;
  • 7% for affluent households. 

“It is also important to note that various studies reported food expenditure share values of up to 51% for vulnerable households (based on 2008 / 2010 data)—thus, even this share could already be higher—about 55% possibly if inflation-adjusted,” said BFAP’s Dr Hester Vermeulen.

The Pietermaritzburg Economic Justice and Dignity group’s (PMBEJD) Household Affordability Index for April 2024, places the average cost of a household food basket at R5,336.31.

This is a 74.93% increase from June 2018, when the same items sat at R3050.58.

Regarding how this budget allocations to essential food items have come to fruition, Vermeulen said that “these shares are expected to have increased over time due to factors such as food prices rising faster than household income levels.”

For example, looking at 8 food products recorded by the National Agricultural Marketing Council, people are paying R317.4 for the same items that cost R145.78 in 2014.

The BFAP Thrifty Healthy Food Basket (THFB) calculates the monthly cost of basic healthy eating for low-income households in South Africa. For March, a four-person household was calculated at R3,781.

PMBEJD’s April 2024 estimate of the average cost of a basic nutritional food basket for a family of four is similarly R3,763.96.

Given that the PMBEJD estimates that, on average, one salary supports 3.8 people, low-income households are stretched regarding their food budgets.

According to PMBEJD’s research, a minimum wage worker would have electricity and transport expenses take up 55.8% of their wages (R2,586.92/R4,633.44) alone – leaving R2,046.52 for all other expenses.

If the entire R2,046.52 went to buy food, then for a family of four, that is R511.63 per person per month—below the food poverty line of R760.

“In this scenario there is no possibility of a worker being able to afford enough nutritious food for their family,” said PMBEJD.

Various government programmes aimed at easing some of these pressures would assist.

The BFAP said that a household with two minimum wage earners, where the two children also receive free school meals and Child Support grants, will have to spend 29.5% of their household income on food to afford the THFB.

However, “this is out of reach for 50% or more of households in South Africa,” said the BFAP.

Similarly, FinMark Trust’s latest study, the FinScope Consumer South Africa 2023, shows that in 2023, around 40% of South African adults borrow money to purchase food.

Even though BFAP expects food inflation to ease towards the rest of 2024 and 2025, “household income pressure could still significantly impact households’ ability to afford food,” said Vermeulen.

Read: Grocery basket showdown April 2024: Woolies vs Checkers vs Pick n Pay and more

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