Shoprite’s claim to be the cheapest – is this true?

Price Comparisons Shoprite

In a recent 702 radio interview regarding its latest financial results, Shoprite CEO Pieter Engelbrecht claimed that the chain “knows we are the cheapest”.
The website Retail Price Watch, the consumer price watchdog, decided to test this claim by looking at the average price of a basket of ten national brands (brands stocked by all stores) across Shoprite, Checkers (both members of the Shoprite Group), Pick n Pay, Spar and Makro in stores around the country.
The website also tracked price changes of those brands between February 2017 and February 2018.
Makro’s basket was in fact by far the cheapest at R176, some R17 below that of Shoprite and Checkers, which came in joint second at R194, with Spar’s basket costing R201 and Pick n Pay’s R203.
In 2017 Makro was also the cheapest by R17, with Pick n Pay and Shoprite and Checkers all within R3 of each other.
“Consumers should make up their own minds as to whether this small basket is representative of the whole. At the very least it means they should be circumspect while shopping and not believe all retailers’ claims,” says Viccy Baker of Retail Price Watch.
“Interestingly, although Shoprite is supposed to be selling to lower middle income consumers and Checkers to high-end consumers (“We are chasing the same consumers as Woolworths”), there was less than 50c difference in the price of their baskets.“
Baker commended Shoprite for selling 600g brown bread at R4.99 a loaf, R2 hotdogs and R4.99 hot chips in some stores, which were also mentioned by Engelbrecht, who said that the group was selling “sub–R5 deli meals. “
“Nevertheless it might be more helpful to hungry South Africans if Shoprite subsidised more nutritious basic foodstuffs such as eggs or frozen chicken.”
Ends

Water Watch 2

The website Retail Price Watch, the consumer price watchdog, which has been tracking the price of bottled water in supermarkets in the Western Cape, says that although prices in the major chains have not generally risen over the past week, the major issue remains shortage of supply.

“Bottled water manufacturers in the Eastern Cape and KZN have confirmed that they are racing against the clock to supply the unprecedented demand for 5l bottled water in the Western Cape.

“However, when water does become available, it is swept off the shelves within an hour, even though most stores are limiting the quantities available to each customer.

Baker confirmed that today (1 February) at least two Woolworths and two Checkers in the Southern suburbs had no supply.

“Pick n Pay Online is advertising 5l Aquartz in quantities limited to 12 bottles, but several people have reported that stock is not available.

“The Western Cape shortage is having a ‘knock-on” effect in many ways: stores in Port Elizabeth have also been selling out fast with Checkers and Shoprite only able to supply 5l bottled water sporadically over the past few days.

“Although Port Elizabeth is facing severe water restrictions, it has not yet named a “Day Zero” so one can only assume that people are stocking up in order to be better prepared in the event of a Cape Town scenario.

“Plastic bottle manufacturers in Gauteng are also experiencing greatly increased demand. Companies in the Western Cape which use 5l and 25l bottles for purposes other than water are finding their businesses affected by lack of supply in the Western Cape and so are turning to Gauteng.

“Plastic bottle manufacturer Blowpet in Bronkhorstspruit says that in addition to orders from businesses in the Western Cape some companies, NGOs and private individuals in Gauteng are buying 5l bottles, filling them at assembly points, and then donating them to various institutions in Cape Town.

“It is difficult to gauge the impact on the environment in Cape Town of all the plastic that is flowing in to the city. In the short term people will probably hang on to their 5l bottles with the intention of refilling them at water points but discarded bottles will add to the already critical plastic waste pollution on our shorelines’ says Baker.

“Plastic does not degrade and if burnt it gives off toxic fumes. Perhaps it is time for the big supermarkets and/or plastic recyclers to come to the party and in good time start offering accessible recycling points around the peninsula before the plastic overflow becomes yet another Cape Town crisis.”

What you should be paying for water if you can get it:

* Aquartz Aquelle Nestle Pure Life House Brand Tsitsikamma
5 litres R17 – R22 R19 – R20 R18 – R23 R15 – R18 R17 – R19

*Based on current prices in the Western Cape where available and prices around the country

 

“Consumers who feel water is being overpriced or that they are being otherwise unfairly treated can write to redgekko@retailpricewatch.co.za . While we cannot promise redress, we will make every attempt to investigate the matter and bring it to the attention of the authorities, “says Baker.

 

“Only email queries will be attended to. “

 

Issued by Viccy Baker

www.retailpricewatch.co.za

redgekko@retailpricewatch.co.za

Water Watch

The prolonged drought in the Western Cape and the threat of “Day Zero” has given rise to fears of price hikes in bottled water yet Retail Price Watch, the consumer price watchdog, has found that major retail chains in the region are sticking to 2017 prices for 5l bottled water.

The net effect is that there has been a rush on bottled water and many stores have found themselves temporarily out of stock, says Viccy Baker of Retail Price Watch.

“Under normal circumstances demand pressure would have increased the price of the larger sizes, but instead stores have been offering specials which have cleared their shelves, even if only for a short time,” she says.

“Retailers are to be commended for not capitalising on the shortage although it is very likely that consumers who are already very angry about the way the water crisis in the Western Cape has been handled, would not tolerate large price hikes,” she says.

“On 25 January Woolworths in the Southern suburbs of Cape Town which sells its house brand for R22/5litres, was offering 2 bottles for R31 and the shelves in most stores were cleared before lunchtime.

“Pick n Pay and Checkers Blue Route were out of stock but promising deliveries on 26 January while Checkers Muizenberg is selling its house brand Eastern Highlands for R15 a bottle.”
Judy Woodgate of Tstsikamma Crystal Water in the Eastern Cape says that demand has been “unprecedented” with her sales managers witnessing people fighting over the last bottle of water on shelves in supermarkets in Cape Town.

“We have been besieged not just by retailers but by members of the public who want to buy at source because they cannot buy from the stores,” she said.

“We are bottling as fast as we can and have an order book which will fill 31 trucks all headed for Cape Town in the next week.”

Woodgate offers a caution to homeowners wanting to buy large quantities of water – many opting for truckloads of more than 5000 litres – that storage in the sunshine can offer water deterioration over time.

Baker says that empty 25l plastic bottles have been sold out at stores such as Mambo’s and Plastic World.

Monique Hector, a spokesman for Mambo’s confirmed that the Cape stores had experienced increased demand and had sold out. “We are expecting deliveries but cannot say when.”

Baker says that over the past year prices of 5l bottled water around the country have generally stabilised.

A Muizenberg resident Heather Hirschman (57) who lives on the 10th Floor of her apartment block said the 87 litres per day that Capetonians had been allowed over the past few months was far too much given the current crisis and that the authorities should have acted earlier to restrict the use of water further and to hike the price for higher levels of water usage.

“It is inconceivable that older or disabled people will be able to manage to carry 50 litres of water per day from taps to their homes,” she said.

5l Still Water Average Price January 2017 Average Price January 2018
Aquartz 23.22 21.7
Aquelle 18.25 19.41
Nestle Pure Life 22.49 20.36
Pick n Pay 17.99 17.99
Thirsti 19.81 18.99
Tsitsikamma 18.37 18.99
Woolworths 22.47 22.99

Ends

Where Your Flowers Come From

Gerberas for Africa

If you’ve ever ordered flowers from a florist, bought a bunch at a supermarket or admired the displays in a church or wedding venue, chances are that the blooms come from Multiflora, the largest flower auction house in Africa.
Viccy Baker from Retail Price Watch visited the market this week to find out how it all works.
Some 600 flower growers from all over this country and even sub-Saharan Africa deliver to Multiflora’s premises in City Deep Johannesburg where the flowers are refrigerated until ready for auction to wholesalers. The wholesalers in turn distribute to almost every city, town and village in South Africa as well as – you’ve guessed it – exporting to other African countries.
This massive operation sees some 6 million stems (individual flowers) auctioned off in a single day, six days a week. If you’re imagining lots of auctioneers shouting their heads off, it doesn’t happen like that. The auction is conducted via sophisticated software in which the auctioneer chooses a price for the flowers which are displayed in a trolley below a clock-like structure. The price rotates lower on the clock face and a buyer presses a button on the desk in front of him stopping the clock at the price he intends to pay and indicating the quantity of flowers he wishes to buy. The trolley gets wheeled out, is labelled with the name and number of the buyer and the flowers are offloaded onto a moving gangway much like a baggage carousel, to be offloaded further down the line by the buyer. There are four “clocks” thus four auctions going on simultaneously so buyers have to be nimble and knowledgeable about prices.
The flowers themselves are mostly grown indoors and are inspected for quality and graded before being auctioned. At the auction last week a single King protea stem was attracting a price of R30 although the average price for all flowers is R1 a stem.
The auction is for registered wholesalers and florists only,, but there is an enormous mall for consumers who want to shop from one of 16 agents for flowers, florist accessories, potted plants and even wedding dresses, and where it is possible to while away a few hours just taking in the beauty of masses and masses of flowers at excellent prices.

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Coca Cola Climbs on Shrinkflation Bandwagon

AB Inbev manufacturer of Coca Cola and other well-known cool drink brands has introduced reduced size containers at the same price as the previous packaging to howls of rage from consumers and industry watchers.

In a recent snap online poll undertaken by the consumer website Retail Price Watch www.retailpricewatch.co.za more than 90% of consumers surveyed felt that the latest shrinkflation to hit our stores was a rip-off.

Pepsi/Kingsley/Twissa here we come!!!

The anger seems to be centered around two things: Firstly the claim by Roger Gauntlett general manager of Coca Cola South Africa that the new size was “intended to reduce consumers’ sugar intake” (the new 440ml bottle apparently contains the equivalent of 11 teaspoons of sugar instead of 13). This claim has been trashed on social media:

Roger Gauntlett is one of those business people who think his customers are stupid….

Where’s the sugar in Sprite Zero?

Secondly the new packaging which will replace the old completely in stores from November comes at the same price – a 14% hike.

Viccy Baker of Retail Price Watch says that Coca Cola’s treatment of its customers is just one more example of large FM CG manufacturers – “Big Food” – riding roughshod over consumers simply because they can.

“Coca Cola’s dominance in the marketplace is well-established. It has kept the price of its products artificially low for years, not out of consideration for its customers but in order to squeeze out smaller competitors, a remarkably successful strategy. It obviously hoped by decreasing the size and maintaining the price, to slip under consumers’ radar in the run up to the holiday season.”

Baker believes that consumers should vote with their wallets.

“Stop buying Coca Cola for your children. A diluted fruit juice concentrate contains 2-3 teaspoons sugar as opposed to the 11 spoons in a 440ml Coke, and costs far less.

“Or make Coca Cola a weekend treat for the whole family, instead of an everyday drink.”

“Reduced sales are the only way that Coca Cola will pay any attention to consumers.”

Ends

Consumers Teach Clover a Lesson

 

18 September 2017

In its financial statements to end June 2017 released on Friday 12 September, Clover Industries Ltd a major listed dairy producer, reports operating profit down 44.3% to R314.5m with headline earnings down by 65.9% to R121.6m.

Viccy Baker of the independent consumer website Retail Price Watch checked the CE’s presentation of the results to find out why.

“Clover clearly pushed prices beyond the limits of consumers’ pockets – and their patience with what had previously been a known and trusted brand,” she said.

“Clover admitted to making a fundamental sales and marketing error – instead of decreasing prices to combat declining sales volumes, it increased them – by nearly 7% according to their presentation.

“Analysts have defended Clover saying that other milk producers are following suit – but the facts as laid out in the table below show that while the price of milk has indeed climbed over three years, inflation for all brands is between 11 and 13.5%.

“Clover’s prices have consistently been 17-20% higher than another large producer Douglasdale and around 10% higher than Fair Cape, which might legitimately claim a “prolonged drought” as it is based in the Western Cape.

“Such aggressive pricing tactics which tread roughshod over hard pressed consumers – at one stage in 2016 Clover 2l milk was selling at over R30 in some stores around the country – will result in a backlash, which is clearly evident in their results.

“South Africa desperately needs companies and shareholders in the food sector that are interested in sustainability, and not just short term profits.”

As the CEO of Unilever International Paul Polman says: “The power is in the hands of the consumers and they will not give us a sense of legitimacy if they believe the system is unfair or unjust. Some companies that miss the standards of acceptable behaviour to consumers will be selected out. ”

Ends

 

Viccy Baker

0823851071

www.retailpricewatch.co.za

redgekko@retailpricewatch.co.za

 

 

Are Black Friday deals in the grocery sector worth it?

Black Friday specials

Are they as special as they seem?

Viccy Baker of Retail Price Watch the price comparison website designed to give consumers more choice visited Makro, Woolworths, Checkers Spar and Pick n Pay on Friday 25th November 2016.
“The grocery sections of Woolworths and Makro did not participate in “Black Friday” and therefore had only their “normal” specials. We could not find any national Spar Black Friday deals although individual stores may have had special offers.
“Checkers and Pick n Pay on the other hand offered numerous Black Friday deals.
“Checkers stood out for the average savings it offered – in several cases savings were close to those claimed by the brochure’s “up to 50% off”. If you bought two packs of Doritos, you were actually getting a 50% discount, and three loaves of Sasko white bread gave you savings of around 35% – only a little less than the 37% advertised in the brochure. If you bought four two litre cokes they cost R11 each – a price that has not been seen for several years and offering particular happiness to those who fear the looming sugar tax.
“Pick n Pay’s savings were a little more ambivalent – the savings on 500g Quality Street were not as great as claimed, with the average price in November and for the year 2016 not being as high as marked. Additionally, Pick n Pay offered several seemingly excellent deals where there had been good specials in the preceding weeks (Nescafe Classic 200g had been selling at R59.50 on promotion in some stores) but the price appeared to have risen to an average R70.92 just before the admittedly great special price of R54.
“In the fruit and veg sector, Pick n Pay appeared to have most items on a special, but again savings were not as obvious – a 4kg pack of potatoes was selling for R44.99 – only a 10% saving on the average price over the year and a 5% saving over the price in November. Two green peppers at R15.99 were actually more expensive than the average for the year and only marginally cheaper than the price earlier in November.
Pick n Pay was offering a special on Albany white bread of around 37% – excellent value and one of the few areas we found where savings were as solid as those of Checkers.

Competition Commissioner’s warning about food prices is timely

Speaking at a conference in Cape Town on Wednesday Competition Commissioner Tembinkosi Bonakele said the Commission is concerned businesses in the food sector are going to abuse drought-related rising prices. He hopes that such prices will go down when the drought fully abates.

Viccy Baker of the consumer price comparison website Retail Price Watch believes that certain prices are in fact being manipulated by retailers and producers as the Commissioner fears, and warns that consumers should shop with caution.

“The average price of 12.5kg White Star Super maize meal has increased by 86.6% since October last year, from R67 to R125,” she says. “The average price of 2.5kg White Star has increased by 33%, from R22.40 to R29.80.

“One would have expected bulk prices to be better per kg but this is clearly not the case.”

 

Exceptionally high price rises – are they justified?

 

The average price of Lipton 160g Rooibos Tea has increased by 108% in a year, from R25.75 to R53.49, in line with rooibos price increases countrywide.

“Yet rooibos is a wholly local product, with the South African market taking up about one third of the local crop in a non-drought year.

“The producer price of rooibos was R17.50/kg in 2015, according to the Department of Agriculture, Forestries and Fisheries. The producer price was expected to increase by 90% in 2016 according to the Rooibos Council.  Even if it increased by 100% as estimated in the table above beneficiation would still amount to about R300 a kilo as opposed to R143 a kilo in 2015.

“In contrast, South Africa is a net importer of ordinary black tea. Yet the average price of Five Roses 62.5g has increased by 16% from R11.04 to R12.88.

“We can all halve our tea consumption by sharing teabags but it’s not so easy with other staple products.

“Lentils have also shown steeply rising prices. A packet of Imbo brown lentils 500g has increased in price from an average R11.84 to an average of R21.52, an 82% increase. The packet says that Imbo lentils are imported from “Canada, Turkey and Australia.”  Yet the rand in September 2016 was almost on a par with its dollar price in October 2015.”

In addition says Baker individual stores are hugely increasing the prices of many personal items (Vaseline petroleum jelly doubling over the last month in some stores).  She urges consumers where possible to vote with their feet and their purses.

“Don’t take these price increases lying down” she says. “Complain to the store manager and write to the producer.

“Ordinary South Africans have managed to influence the price of university fees and toll fees – why not food prices?”

ends

 

 

 

Beware ‘Rogue Pricing’ in Supermarkets

Pricing of household goods in supermarkets needs to be subject to closer scrutiny, both by the consumer and management says Viccy Baker from the independent consumer price comparison website Retail Price Watch.
Baker believes that consumers are being conditioned in advance to accept higher prices because of the drought, transport costs and electricity prices for example.
“While price increases are inevitable, certain stores are taking advantage of consumers by pricing goods at over 50% more than they were a few months ago, pricing which surely cannot be justified under any conditions.
“Individual store managers under pressure to deliver profits may be partly responsible for this, or it may be that the competitive pressure on prices of certain items leads the stores to compensate by marking up other goods to previously unheard of levels.”
The practice is not confined to one chain but can be found across the chains, across the country, and in varying products.
“Cambridge Food, which says it offers “unbeatable value for our savings-focused customers” has increased the price of 50kg of Lion maize meal by 58% since 1 January, when the price was R268.99. On 1 June it was R424.99. The price of 5kg of Lion maize meal has increased by 20.7%, from R28.99 to R34.99.
“One Pick n Pay in Sandton is selling a 180g pack of 7 Pedigree Dentastix dog treats for R63.99, when all the other Pick n Pays in the area are selling at an average price of R42 – 52% higher. In May the price in this particular store was R37.99 – so in less than a month the price has
increased by 68%.
“A Spar in East London is selling a 100g box of Doom Rattex for R25.99. Ten of these boxes can be purchased from Makro at R110.95 (R11 each), while other stores are selling the product for an average of R15.
“Shoprite is now selling 1.75kg of Dogmor dry dogfood for R64.99. In April you could buy Dogmor from most Shoprites for 42.99. This represents a 51% increase in just a month.
“These prices are not mistakes – they have all been confirmed by our data and by conversations with the staff concerned.
“We believe as consumers that we are entitled to “specials” – discounted prices – but the stores have to find their profits elsewhere.
“There are three ways to control this practice – compare prices with other stores in your area and choose the least expensive, complain to the management, and vote with your purse or wallet by not buying.”
ends
Viccy Baker
Red Gekko (Pty) Ltd
www.retailpricewatch.co.za
redgekko@retailpricewatch.co.za
0823851071 (16 June 2016)