South Africa has now officially entered recession and data from 2016 indicate that food price inflation was 12% in 2016, putting a major squeeze on consumers. But not so much on retailers: both Shoprite and Woolworths reported strong growth for the last financial year. Pick n Pay, however, revealed disappointing results in its April review of the financial year. In South Africa, one reason for this may be its price competitiveness.  An analysis by Supermarket & Retailer of a typical basket of goods has revealed that among Checkers, Pick n Pay, Spar and Woolworths, Pick n Pay was the second most expensive. The analysis, which was limited to twelve products, looked at retailer private labels.

We know that South African farmers are reporting bumper crops in 2017, which will help depress price inflation. But the study nonetheless shows how much work Pick n Pay still needs to do to either reinforce its price credentials and take on Woolworths or go harder at Shoprite by passing on cost savings to consumers that are underpinned by improvements in operational efficiency by the retailer.