Shop around for specials and bargains, sign up for loyalty cards and hold out for promotions. These are among the strategies recommended by the Consumer Goods Council of South Africa (CGCSA) as load-shedding increasingly fuels food price hikes.
As the weather turns cold and state-controlled power outages happen more frequently and for longer periods, farming, cold chain management, processing, manufacturing and the packing of food stuffs are going to be disrupted. And this will affect the cost and availability of food.
Zinhle Tyikwe, CEO of the council, which speaks on behalf of some of the biggest names in food production and retailing, said: “The CGCSA is concerned about the impact of load-shedding on food security and disruption of the supply and cold chain, which could affect the availability of food in the stores.”
She said while retailers and manufacturers of fast-moving consumer goods were doing their best to drive efficiencies to pass the benefits on to consumers by containing price increases, “like any business, there may be a point beyond which some price adjustments may have to be made”.
Tyikwe said consumers who are already facing pressure on household incomes, particularly in the lower LSM segment, will increasingly shop around for bargains .
“On the other hand, retailers continue to introduce in-store promotions to enable shoppers to pay the lowest price possible for basics and other goods on the day without having to shop around for specials elsewhere. Furthermore, some retailers are using loyalty cards that allow customers to look for bargain prices or earn points which can be converted to cash for in-store purchases,” said Tyikwe.
Customers are switching to more affordable options, for example from red meat to chicken; chicken to pilchards; and pilchards to soya
— David Mogotlane, Makro spokesperson
A similar sentiment was expressed by David Mogotlane, spokesperson for Makro, who said the bulk dealer had already started noticing shifts in customer baskets around the country.
“A particular example is in protein sources, where customers are switching to more affordable options, for example from red meat to chicken; chicken to pilchards; and pilchards to soya,” he said, adding that given the current load-shedding levels, customers were less likely to buy fresh and frozen products in quantities as large as they usually do.
Wandile Sihlobo, chief economist at the Agricultural Business Chamber of South Africa, said the two biggest impacts on food prices were power cuts and dollar strength.
He said while it was difficult to predict the full impact of load-shedding, it was likely to cause food prices to rise because of financial implications at every part of the process — from harvesting through to processing and packaging, the cold chain and storage, as well as wastage, all the way to the end consumer, who would ultimately foot the bill.
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