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Grocery prices in South Africa spiked during lockdown – but still haven’t returned to normal
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The Competition Commission has published its latest
essential food price monitor, showing how the Covid-19 lockdown impacted the cost of food in South Africa.
The onset of the Covid-19 health crisis and the associated lockdowns saw panic buying behaviour in both wholesale and retail markets.
In terms of wholesale fresh produce markets, initially price increases were observed in vegetables such as carrots, onions, and tomatoes.
In commodity markets for grains, price increases were observed initially due to exchange rate movements as well as the actions of various governments such as limiting exports to ensure food security.
The food division of Woolworths, with its well-heeled customer base that could absorb the shock of the lockdown, saw an increased sales revenue growth of 10.7% for the whole year and 13.3% revenue growth in the second half of their financial year.
This period coincides with the lockdown, and the report says that Woolworths’s “higher revenue growth in this period” was a result of a shift in consumption patterns.
Other retailers saw an increase in revenue margins of between 2% and 9%.
Another trend the report looked at was its “concerns around conduct of retailers over the lockdown” as prices of certain basic items increased out of proportion to wholesale prices.