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Food For Thought: Food Inflation Stats

Speaking to any South African, it will be a matter of minutes before the topic of living costs pops up. It’s a topic we can all relate to. 

The Outlier has detailed stats showing how specific food items have drastically increased costs over the years and it is worth checking out, but here are a few:

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January 2017

March 2024

2l Full Cream Milk

R 26.06

R 35.51

400g Peanut Butter

R 27.31

R 46.15

White Bread

R 13.41

R 18.43

250g Instant Coffee

R 34.83

R 60.34

Year-on-Year Increase

The Bureau for Food and Agricultural Policy’s (BFAP) Thrifty Healthy Food Basket (THFB) is a great way to examine food inflation and its impact on the average South African household. For March 2024, the cost of this basket is R3,781. 

Now, let’s examine the year-on-year rise in inflation and put it into perspective. The BFAP states that the year-on-year food inflation cost is 5.1% (March 2024), which, in all fairness, is better than the 6.1% in February 2024. 

But what does inflation mean to the average South African? 

Let’s use the R3,781 cost of the THFB as an example. With a year-on-year inflation rate of 5.1%, you’d need an additional R192.71 (R3,781 * 0.051) just to maintain the same buying power you had last year. 

And when it comes to South Africans whose salaries or incomes stay the same or don’t increase along with inflation, inflation becomes an erosion of purchasing power. 

How Inflation Erodes Purchasing Power

Imagine you make R1,000 per month, and a loaf of bread costs R10. You can buy 100 loaves of bread with your monthly income. But if inflation increases the price of bread to R11, you can only buy 90 loaves with the same income. In effect, you’re making less because your money buys less.

Many South Africans are experiencing this due to overall inflation. Even if their income stays the same in rand terms, they can’t buy as much as they used to because prices are rising faster than wages. This squeezes disposable income and makes it harder to afford basic necessities, forcing many to lend money to buy basic stuff, which is the beginning of a debt spiral that is very hard to get out of. 

Main Reasons Behind Food Price Inflation

  • A Weaker Rand: The devaluation of the Rand makes essential food imports more expensive.
  • Rising Costs Throughout the Supply Chain: Electricity costs, fuel prices, and infrastructure issues like load shedding disrupt food production, processing, and distribution.

What Can We Do? 

Food inflation will be a challenge for the foreseeable future. But there are ways to be a smart shopper and stretch your grocery budget further. Here are some tips to consider:

Planning is Power:

  • Plan your meals: This helps avoid impulse purchases and ensures you only buy what you need. Utilise specials and plan meals around them.
  • Make a shopping list and stick to it: Resist the temptation to add extras at the store.

Become a Savvy Shopper:

  • Comparison is Key: Check prices across different stores and online retailers. Look for loyalty programs or discount cards that offer savings. Use Price Check to help you.
  • Embrace Generic Brands: Many generic store brands offer the same quality as name brands at a fraction of the price.
  • Think Seasonal: Fruits and vegetables are often cheaper when they’re in season. Explore frozen options that can be just as nutritious and budget friendly.
  • Don’t Fear the Discount Bin: Many stores have discounted produce nearing its expiry date. These can be great for quick meals or freezing.

Cook at Home:

  • Cook at Home More Often: Eating out can be expensive. Ask your friends and family for their favourite budget-friendly recipes and give them a try!
  • Embrace Leftovers: Plan meals with leftovers in mind for lunches or quick dinners the next day.
  • Reduce Food Waste: Plan your portions carefully and store food properly to avoid spoilage.

There’s no doubt that food inflation presents a significant challenge for South Africans. Understanding how inflation works and its impact on purchasing power is crucial. However, the focus should be on more than just the difficulties. We can navigate these challenging times by working together, helping each other (sharing your budget-friendly tips and recipes), planning effectively, and utilising smart shopping strategies. Let’s support local farmers and businesses whenever possible to strengthen our food system.

When facing the challenge of Food Inflation, every little bit helps. And if you have done everything you can, but find yourself in the debt spiral of having to use your credit card to cover your monthly food budget, then it is time to ask for professional debt help. At DebtSafe, we ensure our clients have enough cash flow to repay their debt AND provide for their family’s essential living costs, like food, education, rent, and transport. Don’t hesitate to request a free quote on our service.