COVID-19

The impact of the lockdown on food prices 

By Shani Reddy 21 April 2020

In an attempt to help communities struggling to feed themselves, Pick n Pay has launched a relief fund to provide food and basic hygiene essentials to the most vulnerable during the lockdown period. (Photo: Waldo Swiegers/Bloomberg via Getty Images)

Despite claims of unnecessary price hikes on essential goods, private food retailers are working with government to keep prices low. However, spaza shop owners and informal traders are feeling the full economic impact of the national lockdown. 

On 6 April 2020, the National Consumer Commission (NCC) released a list of goods considered essential in an effort to help consumers combat the Covid-19 outbreak and survive the national lockdown. According to the NCC, stores selling these goods, ranging from maize meal, sugar and meat to cleaning products, may not sell them at a price that is unjust, unfair, or unreasonable. 

Stores must strictly adhere to the regulations and guidelines set by the NCC. However, consumers across Cape Town have reported price hikes in some supermarkets (ranging from R2 to R6) on essential goods. 

Supermarkets such as Woolworths, SPAR, Food Lovers Market (FLM), and the Shoprite Group, attribute certain increases to the end of promotions and supplier-driven increases.

A spokesperson from Food Lovers Market says that “we [FLM] have not raised the prices of any items as a result of the Covid-19 pandemic or the lockdown and we will endeavour to continue our delivery of value-driven products to our customers. 

“Prices will as always be dictated by market conditions, but we have excellent long-standing relationships with our suppliers and our supply of products is stable and consistent, along with pricing. We will not be profiteering from this crisis and have issued strict instructions to both our stores and franchisees in this regard.”

Addressing the question of price hikes, Food Lovers Market says that “there has been a nominal increase in the cost of long-life milk, as a result of a deal with our supplier ending at the end of March and April 2020, which meant we reverted back to the normal pricing”. 

The cost difference of the long-life milk is 10c per litre. Food Lovers Market also says there may be some confusion between items on special and items on regular pricing.

“We find that there might be some confusion between the price of our fresh produce on special and the same fruit and veg offered at the normal price. 

“Promotions usually last a week before returning to normal pricing – these specials are driven by availability from the producer and the fresh produce price at the municipal markets.”

The Shoprite Group told Maverick Citizen: “Product pricing may vary at times depending on whether items have been on promotion or not.” 

The group says that they remain committed to keeping their prices as low as possible for consumers. “The Shoprite Group continues to act in the best interest of its consumers and is working closely with suppliers to ensure that additional stock is secured at affordable prices in order to meet the increased demand.”

Woolworths says that the price of essential goods such as chicken, milk, coffee and vegetables have not increased during the national lockdown. 

In cases where prices have increased, stores such as Pick ’n Pay say that this is due to the increase in demand as well as the need for the supermarket to place a maximum quantity limit on the amount of items consumers may purchase.

SPAR has indicated that price hikes are due to suppliers increasing their prices. Kevin O’Brien, a risk and sustainability executive for SPAR, says that “all SPAR stores are required to strictly adhere to pricing guidelines. 

“In instances where there may be increases, indications point to these being due to supplier driven increases rather than SPAR store owners adding more than their usual, legally allowed, mark-ups.”

O’Brien adds that any SPAR store found to be breaching the pricing guidelines will be “dealt with in an appropriate manner”.

According to the South African Government News Agency, there has also been excellent cooperation between private retailers and government, who have committed to helping the Department of Trade and Industry, and the Competition Commission to ensure there are no unjustified price increases during the National State of Disaster. 

The retail groups include Shoprite, Checkers, Pick ’n Pay, Woolworths, SPAR, Game, Dion, Makro, Clicks and Dischem.

However, spaza shop owners and informal traders are feeling the full economic impact of the lockdown.

A spaza shop owner in Parklands, Cape Town, who chose to remain anonymous, says he has had to increase the price of products in his store in order to survive, with items such as bread increasing from R11.50 to R14.50 and eggs from R10 to R13. 

This may seem like a small amount, but it’s a lot for those in poorer communities who live paycheck to paycheck and cannot access transport to shop at larger supermarkets.

Spaza shop owners and their consumers are suffering tremendously. Some spaza shop owners in Cape Town have resorted to selling cigarettes illegally in a desperate attempt to survive, with prices for a pack of 20 cigarettes selling for as high as R90. 

Speaking to a woman who sells fresh produce in Parklands, it’s clear that many informal traders are also feeling the full brunt of the lockdown.

“I don’t have many people buying from me anymore. I sit here most days from 9 o’clock until late in the afternoon and only sell a little bit of my products,” says the woman, who chose to remain anonymous.

She says that instead of increasing prices, she is forced to lower them just to make some form of income. 

Supermarket chains can afford to keep prices as low as possible and within regulation during the lockdown, but spaza shop owners and informal traders are being forced to take extreme measures with their pricing. This affects them and their customers negatively as many of them cannot work during the lockdown. DM/MC

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