Why aren’t South African food prices dropping in 2024?

In 2024, South African food prices have consistently increased. However, major retailers have not lowered their prices, despite a reduction in energy, production costs, and various external pressures. That is why South African food prices in 2024 are now in the crosshairs of the Competition Commission. It wants answers not excuses …

As The South African has reported regularly with our cheapest supermarket basket series, South African food prices in 2024 are simply too high. And retailers have been slow to pass on the effects of declining costs to consumers, reports Daily Investor.

SOUTH AFRICAN FOOD PRICES IN 2024

Every month, cash-strapped South Africans are just scrapping by with South African Social Security Agency grants. For the nation’s elderly, disabled, and single mothers supporting young children, every rand and cent saved could lead to a better life. Worrying still, billions has already been lost from two-pot retirement system since it opened on 1 September 2024.

Asset managers identified 40-to-49-year olds as the biggest group to dip into their retirement savings prematurely to pay off mounting debt and children’s education. Likewise, the average monthly salary increase in 2023/2024 was pegged well below consumer inflation, which means even if you did receive a raise, you’re bringing home less money than before.

ANTI-TRUST LAWS

All of the above leaps mounting pressure on everyday consumers who can no longer make ends meet, whereas they once did. Specifically, cost pressure on South African food prices in 2024 should be easing. Following four consecutive months of reduced fuel prices, a 150-day cessation to load-shedding, and the rand’s strength against the dollar, why are food prices not coming down markedly?

Accordingly, the Competition Commission says, “South African food prices in 2024 remain high and are increasing at a rate that is unaffordable for low-income households.” The anti-trust organisation calls it an unjustified increase in essential-food prices, spawned previously by factors like the COVID-19 pandemic and Russian war with Ukraine. At its height, annual food inflation peaked at 14.4% in March 2023. Now it has eased to just 4.1% in August 2024, says Stats SA. Nevertheless, South African food prices in 2024 should be going in the opposite direction, not increasing …

SHIFTING FOOD INFLATION

If it’s not greed, then what’s the reason? Experts say major South African retailers measure their internal inflation across a changing basket of goods. This takes into account so-called ‘downtrading’ as consumers look to cheaper products, often forgoing name brands and buying own-label items in-store.

However, a steep decline in the cost of cooking oil, brown bread and eggs – to name just a few items – still hasn’t translated into lower prices for consumers. And the public deserves answers …