African Retail Insight into the African Retail Industry
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According to the December 2022 Household Affordability Index, low income households are changing their purchasing patterns in response to increasingly challenging affordability conditions. This varies from home to home according to each one’s social standards with one thing being synonymous – the impact of food inflation and the general increase in the cost of living affecting them all.
The Bureau for Food and Agricultural Policy (BFAP) noted on their food inflation brief last year that food inflation is likely to remain high in the first quarter of 2023 as the full effects of persistently increasing commodity prices and weaker exchange rates filter through to retail markets.
Makro conducted a comparative shop price survey with 9 essential food & home items on the Outlier online platform to understand how the baskets compare. Survey insights revealed that Makro’s basket costed the least in comparison to 6 other major South African retailers with the ordinary Makro basket costing about R 359.35 in December 2022. The same basket dropped by R 29.95 in January 2023 to the price of R 329.40 and included:
- One 700g Albany Superior Sliced White Bread (or store brand)
- 2-litre store brand sunflower oil
- 2.5kg IWISA maize meal
- 2.5kg Selati white sugar
- One store brand two-litre milk
- 2kg Tastic rice
- 2.5kg Snowflake cake flour
- One 175g Dettol Herbal Soap
- 9-pack of two-ply Baby Soft toilet paper (or store brand)
Judy Gounden, Marketing Vice President at Massmart Wholesale says, “The comparative shop was an exercise solely based on providing our consumer with an assurance that we are thinking of them and working to ensure that Makro is a shopping destination for them that provides multiple shopping experiences for the customer. Families across South Africa are having to contend with the high cost of living in their efforts to ensure their families have the necessary provision. We understand that with inflation and the general increase in the cost of living – the customer is not left with much to utilize for essential items but with Makro, our shoppers can plan within the parameters of their budgets because we offer value for money.”
Considering the high cost of living, the retailer noted that 20% of their customers opted to shop for stationery during the 2022 holiday period instead of the splurging on holiday food items.
“We are starting to see a trend of careful prioritization by the consumer as stats continue to show the impact of inflation across multiple sectors in the country. We encourage our customers new and old to take advantage of our low basket, pantry deals to help them during this tumultuous time. For those who want a convenient shopping experience online, download our Makro App and enjoy shopping from the comfort of your own home,” concludes Gounden
