Economic News

South Africa’s Supply Chain Woes: Sky-High Prices, Empty Shelves & Lengthy Queues

Published by
WIlliam Dube
  1. South African consumers are facing soaring household item prices, longer queues, and product scarcity in stores due to ongoing supply chain disruptions.
  2. Food inflation has reached alarming levels, with the average cost of a household food basket increasing significantly compared to the previous year.
  3. Supply chain disruptions have negatively impacted the nation’s overall economic outlook, and traditional methods of addressing these issues are becoming outdated and less effective.

South African citizens are grappling with a rapid increase in the cost of household items, longer queues, and a scarcity of specific products in stores throughout the nation, according to PricewaterhouseCoopers (PwC). In its most recent Economic Outlook, the financial services firm observed that while disruptions to local and international supply chains have become the norm, they continue to burden consumers with rising prices for everyday goods, among other challenges.

The PwC Global Consumer Insights Survey Pulse (GCIS) revealed that South African respondents have been significantly affected by supply chain disruptions, with consequences including increased prices for household goods, extended waiting times in stores, and certain items becoming out of stock. As for the insights methodology, the GCIS represents the consumer class, with 73% of local respondents employed and 84% aged between 18 and 44 years old, PwC explained.

Shopping has transformed into a challenging experience for numerous consumers, as they prioritize price checking and seeking discounts. The Nielsen Global Outlook report disclosed that consumers are taking advantage of discounts at unprecedented rates, pursuing promotions, purchasing in bulk, and utilizing loyalty schemes to lower their overall shopping expenses.

Food inflation, in particular, has soared to alarming levels. The Pietermaritzburg Economic Justice & Dignity group’s (PMBEJD) latest Household Affordability Index demonstrated that the average cost of a household food basket, containing a range of essential food products, has risen to R4,966.20, an increase of R516.12 compared to the previous year.

PwC also highlighted the impact of supply chain disruptions on South Africa’s overall economic outlook. Data from the South African Reserve Bank (SARB) indicated that by late last year, supply chain pressures were not significantly better than those experienced during the pandemic’s peak in 2021. The bank’s composite supply chain pressure index registered at 102.9 in November of last year, compared to a long-term average of 100.9 between 2006 and 2022.

In February 2023, the S&P’s purchasing managers index disclosed that private sector supply chains faced disruptions due to reduced vendor capacity resulting from load shedding, as well as reported import delays from China. PwC noted that these factors led to considerably longer delivery times for local firms, similar to those witnessed in December when stage 6 load shedding was widespread.

PwC anticipates that supply chains will remain volatile for the foreseeable future, adding that traditional methods employed to resolve issues or mitigate shocks within the system are becoming increasingly outdated and less effective. With the ongoing challenges faced by South African consumers, it is crucial for businesses and policymakers to adapt and find innovative solutions to navigate the turbulent landscape of supply chain disruptions.

WIlliam Dube

William Dube is a finance and economic news expert with over 10 years of experience in economic anaylsis, financial product assessment and market analysis. With a numerous certificates from prestigious universities including but not limited to Yale University and the University of Pennyslivenia. William specializes in providing insightful news developments in South Africa and commentary on investment strategies, risk management, and global economic trends. You can contact him on william@rateweb.co.za

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Published by
WIlliam Dube

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