Vavi: Retailers are taking advantage of consumers!

RETAILERS are taking advantage of consumers.

This is according to the South African Federation of Trade Unions (Saftu).

The trade union federation claimed retailers keep essential food items' prices high despite declining input costs.

Saftu general secretary, Zwelinzima Vavi condemned the unjust practice.

"In its recently released Essential Food Price Monitoring Report, the Competition Commission revealed that input costs of essential food items have declined, yet their retail prices remain unjustifiably high," Vavi said.

He said retail prices don't reflect the decline in input prices, which were said to have been responsible for the retail price increases.

Vavi said: "The commission's report further stated that the cost pressures on food inputs have eased, but retailers are not passing on these prices to essential food items. Moreover, the purported main contributors to the increase in input costs have all eased.

"The rand is stronger. There has not been load shedding in over six months and fuel costs have come down significantly. Yet despite this, retail prices for essential food items remain high."

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He mentioned that maize, brown bread and tinned fish prices are on the rise. He pointed out that while farmgate prices for wheat have come down, the producer price of brown bread has increased.

"The commission further highlighted what it called 'the rocket and the feather' (which means) prices are quick to go up but slow to come down, which suggests that retailers are exploiting the spread between input costs and retail prices to rake in profit," Vavi said.

He said South African retailers have higher profit margins than their international counterparts, upwards of 6% to 8% higher.

Last month, the Pietermaritzburg Economic Justice and Dignity Group, revealed a grim picture of consumers' reality in its Household Affordability Index report.

The report stated that the average cost of a household food basket has increased by 0,5%, amounting to R28,54 in September 2024 compared to the previous month. Over the past year, the price has gone up by R99,91, raising the total from R5 156 to R5 256.

Vavi said in October 2020, a worker on a minimum R3 653 a month salary would have been short of R262.

"Now, the same worker earns R4 633,76 and has a shortfall of R696,86. This is only with respect to the cost of the food basket alone. It doesn't factor in transport costs, ever-rising electricity costs, rent and so on," he said.