BUSINESS
STUDIES current affairs and general retailer
information for Section C: business report
According to the PMBEJD( Pietermaritzburg Economic Justice & Dignity group)
in October 2022, the cost of a basic nutritional food basket for a family of four people is
R3,234.69 – this is notable given that the national minimum wage is around R3,800 a month for
someone who works a full month.
This concern over food prices has been exacerbated by the fact that the cost of diesel has
increased. Diesel is a primary input for manufacturing, agriculture, and trucking. Its increase is
set to have direct knock-on effects carried onto consumers.
Fuel price: Increased on 2nd June due to Crude oil going to $117 per barrel due to shortages
from Ukraine/Russia politics:
Diesel – R21.47 per liter
The economic impact of the Russia-Ukraine War: They supply 30% of worlds wheat, 17% of the
world’s maize and 32% of the sunflower oil.Pushing up commodity prices in South Africa.
Increase in food insecurity in Africa. Led to higher oil and grain prices, which directly push up
prices of key goods within the CPI such as fuel and bread.
Exchange rates:
Rand to the Dollar – R15.47
Rand to the Pound – R19.45
Rand to the Euro – R16.62
Most Recent inflation rate statistics indicate that South Africa's annual inflation rate eased for
the second month to 7.5% in September of 2022, from 7.6% in August, matching market
expectations but still above the upper limit of the South African Reserve Bank’s target range of
3%-6%.
Food prices in South Africa climbed by 11.9% year-on-year in September of 2022, picking up
from an 11.3% rise in the previous month. It was the highest reading since at least January of
2009
South Africa’s retail trade rose by 2% from a year earlier in August of 2022, after an upwardly
revised 8.9% jump in the previous month
, Cooking Oil Prices On A Slippery Slope: Indonesia’s decision to suspend palm oil exports in the
face of domestic shortages has pushed vegetable oil prices to new highs. The prices of palm,
soybean, European rapeseed and even its Canadian GMO counterpart, canola oil, have also
reached historic highs
South Africa's biggest e-commerce retailer Takealot.com, is pushing further into townships and
growing its new grocery partnership to defend its market share.
Competition is expected to intensify following a report US e-commerce giant Amazon will
launch locally in the coming year.
Threats to the retail industry
Effects of Digital Disruption: Rather than consider e-commerce platforms as threats,
retailers are merging online and offline enterprises. With the right IT infrastructure
management services, retail companies can set up online systems to complement their
physical locations
Maintaining Customer Loyalty: The problem for retailers is that customer loyalty takes time
and patience to build. Retail businesses also have to deal with a lot of competition. In the
age of big data, companies have access to a considerable amount of information about their
customers. They can utilise that data to create offerings that are all about the consumers
Heilbron, an expert in retail market trends said in a recent webinar, “Whether it’s to diversify
your product range, investing in ‘shoppertainment’, offering ‘phygital’ experiences that bridge
the gap between online and offline to deliver an integrated shopping experience, or bulk-
buying products to offer deep discounts to cash-strapped consumers, there are many ways for
retailers to thrive. Those that have not already adjusted to realities such as ecommerce and load
shedding risk falling behind the pack.”
National Poverty line in SA 2021: An individual living in South Africa with less than R890p/m
lives below the poverty line
Minimum wage: is R23.19 per hour, and minimum wage in the retail sector is R28. 25
Eskom: Load shedding from May – severe impact on business
Looting in KZN July 2021:More than 340 people lost their lives, and the damage exceeded R50
billion. Most small businesses were looted to the ground and vandalised. Some might never
open again, as most do not seem to have insurance. It is estimated that the impact could cost
the KwaZulu-Natal economy somewhere in the region of R20 billion and 150 000 jobs lost.
KZN Floods: Durban will lose around 1.8% of annual GDP and it will take around three months to
get the city and its businesses back to where the economy was operating before the flood
disaster struck last week.The economic impact of these floods has been severe as many
industries had to cease operations. Preliminary estimates indicate that the loss to the eThekwini
GDP since 14 April 2022 is R737m.
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