The price of a basic basket of 23 grocery items has risen by 13% since February this year, Massmart Holdings said on Wednesday at the announcement of its first-half results to June 26 2016.<\/p>\n
According to an analyst presentation, a food basket containing items such as cordial, coffee creamer, pilchards, maize, salt, toilet paper, sugar, soap, spaghetti and rice now costs R100 more since February \u2013 up R874 from R774.<\/p>\n
Staples such as maize, sugar and peanut butter had among the highest increases.<\/p>\n
In such a subdued economic environment consumers delay purchases, trade down and reduce spending on durable goods to support spending on semi- and non-durables.<\/p>\n
In addition, customers search for value by cherry-picking promotions, buying in smaller quantities and choosing no name brand products.<\/p>\n
Massmart said weaker economic growth and the effect of a softer rand on import prices severely impacted consumer spending on durable goods.<\/p>\n
However, food and liquor sales growth accelerated in line with higher inflation, but also due to \u201ceffective trading and positive price-gaps to competitors\u201d.<\/p>\n
\u201cIn a defensive economic environment, food acts as buffer from the pressure on our general merchandise and home improvement categories,\u201d the company said.<\/p>\n
Statistics South Africa on Wednesday announced the consumer price index was 6% in July, down from 6.30% in June.<\/p>\n
Food and non-alcoholic beverages contributed 0.1 of a percentage point in July. The index rose by 0.5% month-on-month, mainly due to a 2.7% increase in sugar, sweets and desserts, a 1.1% gain in milk, eggs and cheese and a 0.8% surge in bread and cereals.<\/p>\n
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