High inflation forces SA households to buy less food, says PwC

Fewer food and beverages bought from local grocery stores in 2023, the PwC report shows. Picture Ayanda Ndamane/Independent Newspapers.

Fewer food and beverages bought from local grocery stores in 2023, the PwC report shows. Picture Ayanda Ndamane/Independent Newspapers.

Published May 24, 2024


PwC South Africa has called for sustainable solutions to adequately feed the South African population following evidence that households were buying less food as their spending power declines alongside elevated inflation.

In its fifth South Africa Economic Outlook report for 2024, PwC said failure to find solutions around food security could be problematic as the population is expected to grow by another four million people by the year 2030.

PwC South Africa chief economist, Lullu Krugel, said South Africans were buying less food because of pressure on household finances.

“As a society, we need to make better use of our resources to ensure that food production is increased and that improved nutrition is available to more people at affordable prices,” Krugel said.

“This requires agricultural players to produce more food crops in a sustainable manner, manufacturers to make food and beverage products more efficiently, and for retailers and consumers to cause less loss and waste at the consumption level.”

The report showed that in 2023, the volume of food and beverages sold per capita at South African grocery stores and supermarkets declined by 3.2%.

This can be attributed to several factors, including the inflation-adjusted buying power of salaries and wages declining by 1.0%.

Also, household spending was reprioritised as home loan repayments were at least 40% higher compared to three years ago due to higher interest rates.

This year, El Niño could cause a 25% drop in local white maize production – if this happens, it will increase the cost of staple maize meal products.

PwC South Africa smart manufacturing leader, Vinesh Maharaj, said South Africa needed to make better use of its food resources.

“With half of food loss and waste occurring during the manufacturing process, it is imperative that food producers apply modern techniques to better plan their operations in order to minimise wastage,” Maharaj said.

Modern technologies allow for better demand forecasts, production planning and input sourcing, thereby reducing surplus inputs and outputs at the factory level and the ultimate waste of food products.“

Maxwell Mudhara, a professor of agricultural economics and director of farmer support group at the University of KwaZulu-Natal, said PwC pointed out some problems that SA has been facing as a society and they suggest some solutions.

“This high food inflation, compounded with a stagnant economic growth, means that the purchasing power is declining significantly, hence the decline in the amount of food purchased from the retail level.

“The second problem is that of food waste, a well-known and growing evil facing emerging and advanced economies. The threat of food waste is against the irony of large sections of the population going to bed hungry on a daily basis,” Mudhara said.

“This would suggest that, to some extent, combating food waste or increasing productivity in the existing production base could lead to a deacceleration in the food price inflation as more food become available on the market.

However, Mudhara said the challenge was to ensure that those who were failing to access food currently were given the means to be able to purchase the food they desired.

“An approach would be required that ensures a broad production base. For example, all those who have land should be supported to bring the land into production,” he said.

“That would ensure that food consumption takes place close to the production point and the carbon footprint of the food is reduced. More people would not only have food but will be able to sell for income generation.”