https://images.hive.blog/DQmY255uj7xrM16H6JTUf9RyxjtbDywgx1TxrjhbZLf1wcN/Food-Lovers.jpg 

[source](https://businesstech.co.za/news/wp-content/uploads/2021/04/Food-Lovers.jpg)

**I know the prices we pay for items in South Africa is still cheaper than what most would be paying around the world, but everything is relative to the salaries in each country. The budget you have needs to stretch as far as possible and somehow think we are being short changed by the shops under the smoke and mirrors of inflation.**


Over the last 12 months  I know my shopping habits have changed due to economic needs and inflation. Cheaper is not always better but when it is like for like as in milk  or bread I always look for the cheapest option. Knowing your standard prices is a must as the differences from various stores sometimes pays you to shop in 2 different stores and not just one. 

This week my daughter asked me the price we pay for the instant cappuccino sachets as we have changed our brand recently due to the brand having changed it's recipe and also to escalating prices. She had been offered a special by her bank  which worked out 3 x cheaper than the shops even when they are on special. I pay roughly R50 per box of 10 on special and R60 at normal price yet she bought 10 boxes at R18 each.

I must admit I was a bit stunned as it goes to show you what sort of markup we are paying today. The bank knowing the ban will make a profit from this so what is the real price of the product? Electricals such as televisions I knew you would divide by 3 to get to the cost price or close to it but food stuff has always had tighter margins. 

Maybe not so anymore judging by this and even throwing in the logistics with warehousing and delivery along with the store rentals and staff bill having a 300% mark up is still robbing your customers. 

I did a rough calculation on just 1 product knowing the pack size of the box and cost of warehousing and distribution struggled to justify the prices they are charging. Just on this item which has 5 different variants the chain store I use is making anywhere north of $250K per month or R4.5 million in local currency. That is way off the possible 15% we used to think grocery shops make as that is just not true today. Because they sell a lot of products to so many people they deal in volume the thinking is small profits, but big volume making big profits.

Currently there is a bread war going on which is good for the consumer as depending on what stores you use one of the brands will be heavily reduced followed by another brand the following week. The prices vary by as much as 30% which again highlights the mark ups the stores are making and it is not what it used to be what I knew 20 years ago. The number of slices of bread has been reduced as 1 loaf wont cover the needs of the household anymore and that is not me counting how many slices are there it is just noticeable. 

Back in the late 90"s stores would work on mark ups of around 15-20% and less for the staples like bread and milk as that was the lure to get you in the store thinking if those items are cheaper then the entire store has to be cheaper.  That is not the case today as the prices have increased so much it is hard to work out what the genuine price levels are anymore.

Spending R2K ($100) a few years ago was considered a decent sized shop and now it may be just a few packets depending on what you purchased. Cheeses for instance have increased by as much as 50% in the last 6 months with the block size shrinking from 1kg down to a 600g offering even though that same block is only slightly more. Guaranteed by the end of the year it will be a 500g pack size. That is shrinkflation happening before your eyes over a very short period of time and one would have to be blind not to notice the size difference.

Owning a supermarket today looks like it could be a gold mine even though I wouldn't ever consider it here due to the high crime rates. Having worked for the tobacco business I knew many store owners as they were my clients and unfortunately many were murdered on the job. Still would be tempting in another country out of Africa.

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