Rising prices bring consumers to their knees
Durban - Debt-burdened consumers are cutting back on food and luxuries in a bid to keep up with a rising cost of living fuelled by rising food prices and spiralling municipal bills and transport costs.
This is according to consumer activists and debt counsellors.
Both the Pietermaritzburg Economic Justice and Dignity Group (PEJD) and Household Affordability Index (HAI) released last week and the latest National Agricultural Marketing Council’s Food Basket Monthly for June 2019 show that the prices of many basic food items have continued to soar above CPI inflation of 4.5% over the past year.
The price of groceries in the index, which tracks prices in stores where mostly lower-income consumers in Pietermaritzburg shop, showed that items that increased above CPI included: rice (6%); white sugar (11%); cooking oil (9%); soup (9%); tea (17%); tripe (25%); gizzards (12%); butternut (23%); spinach (15%); canned beans (15%); bananas (14%); polony (26%); white bread (5%) and brown bread (6%).
The cost of the household food basket increased by R14.70 (0,5%) from R3 050.58 in June 2018 to R3 065.28 in June 2019.
Similarly, the NAMC basket of 28 food items surveyed in urban areas showed above-inflation price hikes for the following items: apples per kg (8.9%); bananas per kg (15.7%); 400g tinned fish, excluding tuna, (6.8%); polony per kg (13.8%); brown bread 700g (10.9%); white bread 700g (8%); maize meal 5kg (12.5%); cabbage (17.9%); potatoes (6.3%), tomatoes; (15.2%) and white sugar 2.5kg (8.7%).
eThekwini Municipality price hikes on July 1 included a 15% water tariff increase for domestic consumers, a property rates hike of 6.9% and an electricity tariff hike of 13.07%, subject to the National Electricity Regulating Authority reviewing Eskom’s tariff increase.
PEJD co-founder Mervyn Abrahams said consumers were “struggling massively” to survive. He said poor- and middle-income consumers were cutting back luxuries and food spending as these were the only expenses within their control.
Abrahams said the price hikes of some vegetables and meat cuts were seasonal, but it was difficult to understand why the price of foods such chicken, sugar and UHT milk had not decreased because of the flood of cheap imports.
“We think prices should come down and they are not coming down.”
Durban debt counsellor Vanita Harrypersadh, the owner of Spendwise Debt Counselling, said she had seen an increase in the number of consumers seeking assistance, and existing clients were battling to meet their restructured debt repayments.
“A lot of my clients who were paying fine over the years now can’t even pay their restructured debt amount because the price of everything is going up and salaries are down,” she said. “We counsel consumers to look at everything they spend on and cut down a lot, they have to trim down everything in their life.”