Basson chides food stores for using drought as excuse to hike prices

Shoprite CEO Whitey Basson.
Photographer: Russell Roberts

Image source: BDlive

There were still affordable food options available in the short term to help budgets go further, Basson said.

Consumers could take advantage of alternative, cheaper proteins such as pork — where the price had actually declined 4 % — rather than beef, the price of which was 15% higher than a year ago.

The prices of frozen chicken, UHT milk and canned vegetables overall had actually decreased during March this year, the company said. The price of starch substitutes such as pasta (used rather than potatoes, which are experiencing high inflation due to the drought) had not been affected to the same extent and could help consumers’ budgets go further.

Not all items had been equally affected either. Frozen vegetables, for example, had experienced far lower price inflation of about 2% compared with fresh vegetables — carrots, for example, were up 60% due to the drought — because of the lag effect on their price combined with longer-term procurement contracts the group had secured.

While the country’s official food inflation spiked to 9.5% in March, Shoprite’s selling price inflation for the same month was less than half that at 4.3%. Shoprite Checkers also had the lowest internal food inflation of all four major supermarket chains according to most recent published financial results, Mr Basson said.

Shoprite had locked the price of its own bakery loaves of brown bread across the country at R4.99 — less than it cost a year ago. The price reduction would be maintained for an extended period, and more food products would also be subsidised over the next few months to cushion the effect of inflation on South African consumers.

Once relief from the drought occurred, basic commodity prices should normalise again and, combined with the rand’s recent strengthening against the US dollar to levels last seen in August 2015, the price of imported products would also start easing, Shoprite said.