‘SA food prices are TOO high,’ says Competition Commission
Damning report finds SA food prices are too high and retailers continue to grow their profits while citizens bear the brunt.
Following our recent article on the cheapest supermarket prices, the Competition Commission has released a damning report that confirms SA food prices are too high.
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In the Competition Commission’s latest Essential Food Pricing Monitoring (EFPM) Report, it says SA food prices are too high while retailers continue to grow their profits, reports Business Tech. That’s correct, even though inflation and producer costs have dropped, the price we pay at the tills has not. But why?
SA FOOD PRICES ARE TOO HIGH
The commission noted a ‘rocket and feather’ effect in South African food pricing, essentially where prices shoot up quickly but take much longer to come down, and in some cases not at all. The report notes that maize meal, cooking oil and bread have suffered badly from this ‘rocket and feather’ effect.
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SA food prices are too high, and this is evident because food inflation remains twice as high as goods and services, noted the commission in its report. Ever-present load-shedding is a possible reason for prices remaining high. In many cases, retailers have spent millions to deal with the impact of load-shedding on their supply chain and store operations.
THE NUMBERS AND INFLATION LAG
Revenue in the South African grocery sector is 38% up since 2019. The big supermarkets in South Africa collectively increased profits by 26% to R16.6 billion in 2023, concluded the report. It hoped that SA food prices were suffering from inflation lag, and that prices on shelf were yet to reflect the easing of inflation from three months ago.
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