PMBEJD New Food Price Data, Research Report & September 2020 Household Affordability Index

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PMBEJD releases a new Household Affordability Index with food price data from Johannesburg, Durban, Cape Town, Springbok and Pietermaritzburg.

The deepening household affordability and food crisis in South Africa, exacerbated by Covid19 compelled us to expand the scope of the Household Affordability Index beyond Pietermaritzburg. We ran a pilot project from April-August and are now able to provide new food price data for Johannesburg, Durban, Cape Town, Springbok and Pietermaritzburg.

Using the Pietermaritzburg methodology, and in conversation with women, we have designed a new household food basket which women living on low incomes tell us constitutes a good proxy for the typical core foods and volumes of these foods in the trollies of low income households, given affordability constraints. Food prices are tracked directly by women data collectors off the shelves of 44 supermarkets and 30 butcheries which target the low-income market. The supermarkets are in Soweto, Alexandra, Tembisa and Hillbrow (Joburg), Khayelitsha, Gugulethu, Philippi, Delft, Dunoon (Cape Town), KwaMashu, Umlazi, Durban CBD, Mtubatuba (Durban), Springbok (in the Northern Cape) and Pietermaritzburg CBD. There are 43 foods in the household basket. The basket is designed for a household with 7-members, the average household size of families living on a low income.

This expanded data provides a better lens into the national picture of household affordability and food prices in the homes of families living on low wages and low social grants, and with workers who are unemployed. It is able to track how families living on low incomes are responding to a deepening financial and economic crisis, given rising expenditure costs, job losses, stagnant employment, rising household debt, a deepening food crisis, deepening poverty and entrenched inequality.

The average cost of the Household Food Basket is R3 783,16 in September 2020. This is well beyond the affordability thresholds of families living on low incomes. The National Minimum Wage for this same period was R3 487,68. Now that we have far more comprehensive empirical evidence of the food affordability crisis beyond Pietermaritzburg (data that reinforces several years of investigations), in the big metropolitan areas of Johannesburg, Durban and Cape Town – it is critical that we act. In the immediate-term top-ups on the social grants should be made permanent.

It would be unwise to remove the top-ups to the social grants and the R350 Special Covid19 grant whilst the cost of goods and services remain as high as they are, and where income levels have not recovered, and while jobs remain elusive. Removing the top-ups now will see families worse off than they were before March 2020. Because most families were not able to absorb the shock that came with Covid19, removing the grant too soon could act to thrust already very vulnerable households into a situation whereby they may not be able to recover.

The cost of the Household Food Basket:

In September 2020, the average cost of the Household Food Basket was R3 783,16.

The cost of the Pietermaritzburg Household Food Basket was R3 601,38.
The cost of the Durban Household Food Basket was R3 731,40.
The cost of the Joburg Household Food Basket was R3 808,26.
The cost of the Cape Town Household Food Basket was R3 834,10.
The cost of the Springbok Household Food Basket was R3 989,84.

Between August 2020 and September 2020, the cost of the Pietermaritzburg Household Food Basket decreased by -0,5% (-R17,36). Over the past six months of lockdown (March 2020 to September 2020), the cost of the basket increased by 7,2% (R232,62); and year-on-year (September 2019 to September 2020), the cost has increased by 10,4% (R326,41). The total cost of the basket in September is R3 453,62. Noting that the new Household Affordability Index for Joburg, Durban, Cape Town, Springbok and Pietermaritzburg is only now available for release, with the first data set of September 2020, we have however been watching the rises in the pilot data since April 2020 very carefully. This leads us to conclude that the massive spikes and upward trends in the Pietermaritzburg data over the past 6 months were also playing out nationally. See page 5 in attached report.

September 2020 Household Affordability Index

PMBEJD Research Report 30 September 2020

For information and media enquiries, contact: Mervyn Abrahams on 079 398 9384 and mervyn@pmbejd.org.za; or Julie Smith on 072 324 5043 and julie@pmbejd.org.za.