During its interim results presentation in August, Massmart displayed a basket of basic items which it said had increased by almost thirteen percent in the six months February – August 2016. This figure suggested 25% y/y inflation on these items, causing concern among analysts and industry watchers.

Retail Price Watch the independent consumer price comparison website looked at average prices of 20 items from the basket pictured by Massmart, in Makro, Checkers, Pick n Pay and Shoprite in February and August.

“Massmart did not detail products so a few sizes and brands had to be estimated for an accurate comparison across all stores”, says Viccy Baker of Retail Price Watch.

“Nevertheless the result is surprising. Makro’s inflation on these 20 goods over the six months was 9.2%* whereas Checkers was 11.2%. Pick n Pay was 6.2% and Shoprite came in with the lowest inflation of only 4.4%.” Perhaps more interesting is the fact that Makro’s prices remained the lowest despite the 9.2% inflation.

“Makro’s prices for the basket were more than 7% lower than Checkers, which had the highest average price in August of R503.61, while Makro’s average price was R469.50”. “Prices at the supermarkets are very similar to each other – for instance the February prices of those 20 items show that Checkers, Pick n Pay and Shoprite were on average less than R6 apart, while in August they were less than R23 apart, “says Baker.

“The question consumers need answered is whether this is a good thing (the wholesale price is about the same to all retailers and all retailers are charging the very lowest they can while still making a profit) or a bad thing (retailers are watching each other’s prices and raising them all to a comparable level).”

*We are not challenging Massmart’s figures as we could not see all their products but reporting the results of our own findings.

Viccy Baker Red Gekko (Pty) Ltd www.retailpricewatch.co.za / 0823851071