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.”
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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

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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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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.

The shocking truth about toilet paper. Are South African consumers getting a bum rap?

 

A landmark study* done in the United States which focused on toilet paper because it’s non-perishable and steadily consumed, concluded that poor people pay more for toilet paper (and many other things) simply because they cannot always afford to go to the cheapest stores or buy bulk deals or end-of month specials, for example.

The consumer website Retail Price Watch investigated whether the same is true in South Africa.

“It’s extraordinarily difficult to tell which brands and stores are cheaper because of the miasma which hangs over the industry – a trip in the dark to the dunny without a torch would be easier than sorting through the various brands, pack sizes and rolls to find the true cost of a sheet of toilet paper to consumers,” says Retail Price Watch’s Viccy Baker.

“Nevertheless in the first two weeks of March our intrepid team waded through the mire and priced more than 100 items on the market individually, adjusting the price of each roll to what it would cost if it were 500 sheets, to ensure an apple for apple comparison.

“We then worked out what a consumer who bought a basket consisting of one brand each of single and double ply rolls in the store, would pay. “

 

Expensive for everyone

“Boxer which says it targets the lower LSM section seems to live up to its slogan “Never pay more than the Boxer Price”  while Choppies which targets “the lower to middle-income sectors”  mainly in smaller towns comes fourth out of seven in single ply and is the most expensive in its 2 ply rolls.”

“What is perhaps more surprising given their supposed competition, is the very small differential there is in pricing among the majors Checkers, Makro, Pick n Pay and Shoprite – less than 12% between the cheapest and the most expensive single ply and less than 9% on the cheapest and most expensive double ply.

“In fact, if the price per sheet is rounded up to cents, all South African consumers are paying roughly 1c a sheet for single ply and about 2c a sheet for double ply whether the household seeks to impress guests with Dinu and Twinsaver or if they are content with Ritebrand, and whether they live in rural areas or have easy access to the majors.

“The exceptions to this are the Makro brand Bunny Soft, or Bummy Soft as it is affectionately known amongst the toilet paper cognoscenti which comes in at about half a cent a sheet as long as you can afford to buy 36 at a time, and some Baby Soft two ply products which come in at 3c a sheet.

“We attempted to reach two of the major manufacturers Kimberley-Clark and Nampak without success despite repeated attempts to speak either to their PR person or managing director, to discuss the reason for this.

“Sadly, in line with the American research it is true that in general you pay more for a single roll than for a large pack, although many of the stores leave a bit of a bad smell with the price manipulation of really large packs (18 Checkers House Brand single ply cost R4.82 each while 15 are R3.88 each for example).

“We were especially interested in the Choppies pricing strategy.

“A pack of ten Choppies single ply rolls costs more than 10 individual rolls (R4.50 each as opposed to R4.29 each). A pack of 4 double ply rolls containing only 250 sheets each is R24.99. The price for one 250 sheet roll is therefore R6.25. The price of a pack of nine double ply rolls with 350 sheets each is R49.99, or R5.55 each. If we were a company listed on The JSE, we might be more careful about getting a smear on our reputation with this sort of practice.

“Did we hear you say that 250 sheets in a 2 ply roll is not in accordance with the SA Tissue Manufacturers Association (SATMA) code of conduct, which specifies 200 or 350 sheets in a double ply roll?

“Well SATMA itself has disbanded, a fact that it curiously forgets to mention on its website (sorry it is there but under the Resources and Downloads section of the PAMSA website) allegedly due to non-payment of members fees, so Choppies is well within its rights to print 250 sheet rolls.

“It is clear that as in other areas of South African business, manufacturers and retailers can proceed unafraid that the s*** might hit the fan, because somebody turned it off and left the building.

“A common question is whether you are getting more value for money out of a two-ply or a single ply roll. This depends on a number of factors including your family’s bum habits.

“If you believe that a two-ply roll is double the thickness of a single ply roll, and if your family is disciplined in its use of toilet paper, a two-ply roll represents better value for money than single ply.  This is despite the fact that 2-ply rolls come in sheets of 350 and not 500.

“If they are prone to diarrhoea/you are toilet training a youngster/you have a puppy in the house rather find the time to go to Makro and buy plenty of Bummy Soft, secure in the knowledge that you are getting ripped off by a much smaller amount than normal …

*http://yesimorhun.com/wp-content/uploads/sites/18/2015/01/Orhun_Palazzolo.pdf