By Estelle Ellis and Karyn Maughan
Cape Town shoppers now pay 44 times more for basic groceries than they did in 1970.
A Cape Argus investigation revealed that it is no exaggeration when the older generation complains about how little R20 can buy today, compared to 30 or even 10 years ago.
We compared food prices advertised in newspapers over the past 30 years.
Our shopping basket consisted of:
- Two litres of full cream milk; 750g of a cheaper brand of instant coffee; a loaf of brown bread; 500g of cheddar cheese; 500g of apricot jam; 500g of beef mince; a 100g slab of chocolate; a toilet roll; 12 extra-large eggs; 500g of rice and 500g of butter.
In July 1970, these items would have totalled R3.24,5 - today the same shopping basket would be 44 times more expensive - at R145.19.
While this increase over the past 30 years may not be surprising, what is interesting is that in 1990 the same shopping basket would have cost you R29.24.
Economists have found that over the past eight years the price of food has risen by roughly 8 percent a year.
Azar Jammine, the Johannesburg-based chief economist for Econometrix, said that in comparison, the prices of other goods had increased by only 6 percent annually.
According to the Reserve Bank, price increases accelerated substantially during 2000. But the good news for consumers is that the Bank indicated that the upward trend in prices has begun to wane in recent months and the increase in prices at both the producer and consumer level has stabilised.
Although salaries and loans have increased in general by 7 percent from last year, this has not been enough to absorb the rising cost of basic foodstuffs. Jammine said food prices were influenced by specific factors in specific years.
"In the mid-1990s South Africa experienced a severe drought and last year food prices increased because of the impact of the floods in the northern part of the country.
"But one still should ask whether these price increases were caused by freak phenomena or whether they have become run-of-the-mill practices."
Jammine said that the disbanding of the Agricultural Marketing Board, which protected farmers and kept basic food prices stable, could be another cause.
He added that the introduction of a free market system could have impacted on South African food prices, causing them to increase more rapidly. The reduction of import tariffs in the mid-1990s resulted in more food being imported and consequently a wider range of product choice is available to consumers. The drop in the value of the rand influenced the rise in the price of these imported foods.
He said that, by comparison, petrol prices have not increased as much as those of food.
The Reserve Bank's quarterly bulletin indicates that household spending patterns have had a negative impact on the retail sector, since a greater part of people's income is absorbed by cellphones, lottery tickets and security services, at the expense of more traditional consumer products.
However, consumers are more willing to buy food on credit, which, according to the Reserve Bank, has softened the blow of these changing spending patterns.
The report stated that, in the first half of this year, South African households generally used less power and household fuel like paraffin, probably because of the cost involved.
They also said that the motor trade had "remained buoyant" in the first quarter of 2001, with easier access to information via the internet "allegedly" contributing to the vibrancy of the used-car market.
In 1970, the average price of a new bakkie was R1 575 compared to its current price of R48 000.