Food Price Hikes hit Consumers hard

South African consumers’ grocery costs are increasing at almost three times the rate of inflation. Consumers are spending more and more money on essentials due to the consistent rising costs of consumer goods and services. The spending patterns of clients on essential needs, such as food expenses, petrol and travel expenses, in relation to their income have drastically increased. Most high-income clients – those earning R20 000 and above – suffered a 14.1% increase in food expenses in the past nine months. Statistics SA said on Wednesday the consumer price index (CPI) annual inflation rate for all urban areas increased to 6.3% in July alone.

The CPI measures changes in the price level of consumer goods and services and exceeded the prediction of a 5.9% average for 2013, as well as the SA Reserve Bank’s target range of between 3% and 6%. Breaching the target range for inflation can be attributed to not only a drastic increase in petrol prices and the weaker rand, but also broader economic pressures.

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