||24 June 2012 07:00
Chantal Rutter Dros
|Show: ||Carte Blanche|
How exactly has inflation shaped the South African consumer landscape? Are we considerably better off than a decade ago or does the future look bleak?
Chantal Rutter Dros (Carte Blanche presenter): "We took a selection of 25 everyday household items and we compared their prices over a 10 year period. The results way exceeded our expectations."
A simple loaf of white bread now costs just over 200% more than a decade ago, while a tin of Ricoffy has increased by 187%.
Woman 1: "You can't even buy the meat, the milk... everything is too high."
Stewing beef is up by 194% and a 1 litre sachet of milk up by 198%. That is almost three times what it cost back in 2002.
Woman 2: "I'm getting less for my rand than I was this time last year."
It's pretty worrying, says economist Chris Becker, because at this rate salaries will have to increase by at least 13% each year just to break even. But increases have averaged well below that.
Chris Becker (Market strategist): "What happens over time is that your poorer people, especially the unemployed, as well as people on fixed salaries, really see a decrease in their standard of living. And their wages just can't keep up with the basic goods they need to survive."
Chantal: "With an average inflation rate of 6% your monthly shop should only cost you 79% more than a decade ago. But most grocery items have effectively doubled and even quadrupling, thus costing you substantially more."
The only items on our list to remain below the inflation rate? ... onions, cake flour and the humble cabbage. The remaining 22 grocery items in our basket escalated way beyond this inflation rate.
Chris: "Inflation is really a monetary phenomenon. It's driven over the long term by the Reserve Bank keeping interest rates too low for this economy and it results in money supply in excess of what the economy can handle, and that's what drives prices higher."
This year's retail figures revealed that sales grew at the slowest pace in more than two years - an important indicator of a slump in consumer spending. These dismal sales figures suggest that consumer spending is being eroded by massive hikes in the cost of services.
Medical services, such as doctor's consultations, have risen by at least 104%.
Woman 3: "In the two years I've been out of the country prices have gone up exponentially and it's quite a shock."
Financial services, like bank charges, have increased by almost 40%.
Planning another baby? Think twice. The cost of sending your child to a State high school in Johannesburg has tripled in ten years. It will now set you back almost R24 000 compared to R8 000 in 2002.
So who's responsible for the biggest hikes in administered services?
Thanks to Eskom, we now pay 229% more for electricity.
Despite outcries over service delivery, municipal services have risen by 121%.
Chris: "Political bodies don't know how to correctly price goods and services. The reason Eskom tariffs are going up so fast at the moment is because it was priced too cheaply in the period before two years ago. That's why prices are having to be jacked up quite aggressively right now.'
Chantal: "While increases in the price of fuel and electricity get consumers hot under the collar, it's an increase in food prices that is an emotive issue."
And nobody knows this better than caterer Mahalia Jackson, who was unable to keep her business afloat. Spiralling food costs became just too much to absorb.
Mahalia Jackson (Caterer): "They would want you to stay at the old prices you originally quoted, regardless of what was happening, regardless of fuel prices going up. Everybody was watching their expenses in their companies so they refused to increase their budget. So you have to go along with their budget, but still deliver the same product.'
About 79% of the average South African's salary is spent servicing debt. And most of those between 30 and 35 years old haven't managed to save R50 000, despite having worked for a decade.
Deborah Solomon (The Debt Counselling industry): 'The second you have to pay for food on a credit card, it's a big problem.'
Deborah Solomon of the Debt Counselling Industry says using unsecure debt such as loans and accounts to pay the bills, could easily lead to a hidden credit crisis.
Deborah: 'The second you start taking out additional loans to either help yourself get through the month, because of living expenses, or to help pay debt, that's a serious problem, and that's rolling money.'
Mahalia: "I have monies for maybe my bond... just the car. It was... for me it was a snowballing effect and eventually I couldn't breathe anymore."
If you're feeling breathless too and want to drown your sorrows, forget it. Booze has increased by 115% over the past decade. Rather Tata ma Chance. Yes, the price of a lottery ticket has increased by only 40%.
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