Surging food inflation is pushing SA consumers to the brink and forcing many to cut items such as fresh milk and vienna sausages from their list of essentials, according to a report from market-research and global consulting company NielsenIQ.
Consumer inflation’s acceleration to a 13-year high is being clearly reflected in shopping patterns, the market-research firm said in its latest SA retail report, with sales volumes of items such as frozen meat and cooking oil starting to show significant declines as surging prices bite.
The monthly retail report by NielsenIQ, State of the Retail Nation, is based on sales data from 10,000 stores of main retailers Woolworths Spar, Pick n Pay and Checkers — as well as 143,000 independent stores and spaza shops. It measures more than 80% of grocery sales in SA.
The report shows that 12 of the Top-40 grocery products are showing double-digit inflation, with cooking oil seeing the highest rate — at 38% — with a similar fall in unit sales for the four weeks to June 1. This was the first fall in unit sales since the onset of the war in Ukraine, Nielsen said.
Frozen meat prices experienced 22% inflation, and a 17% decline in unit sales, but a key staple, bread, saw prices rise by 10%, while volumes rose 17%.
“Consumers have reached a tipping point of affordability in the face of the higher prices they currently confront,” NielsenIQ SA MD Ged Nooy said in a statement.
“There is also clear evidence that consumers are becoming far more circumspect about what constitutes a ‘must have’ in their shopping baskets with fresh milk, vienna sausages, breakfast cereals, margarine, cheese, soaps, skincare and deodorant all on the chopping block.”
Russia’s invasion of Ukraine has prompted surging food inflation globally and is a major threat to food security. The invasion has severely disrupted exports from a country that is the largest exporter of sunflower oil, and the third-largest exporter of barley.
While this inflation is a global phenomenon, SA consumers are also some of the most price-sensitive in the world, with NielsenIQ saying on Wednesday half were buying whatever brand was on promotion, while 44% have stopped buying certain products.
“The current wallet squeeze means shoppers are on the lookout for authentic, known and trusted products that represent ‘security of purchase’ in terms of providing everything they need at the lowest price possible,” said Nooy.
“As South Africans face a tsunami of utility and grocery price hikes, our research also shows that consumers are also spending less on discretionary items such as home-delivered meal kits, pre-prepared instant meals and snacks, or luxury or new products.”
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