Tag: prices

It costs R4 500 to feed a household in SA

By Vernon Pillay for IOL

The April 2022 Household Affordability Index, which tracks food price data from 44 supermarkets and 30 butcheries, in Johannesburg, Durban, Cape Town, Pietermaritzburg and Springbok, shows that in April 2022 the average cost of the Household Food Basket is R4 542.93.

Food baskets increased in all areas tracked:

  • The Joburg basket increased by R65.86 (1,5%), and R242.49 (5,6%) year-on-year, to R4 563.09 in April 2022
  • The Durban basket increased by R138,27 (3,1%) and R409.21 (9,8%) year-on-year, to R4 583.05 in April 2022
  • The Cape Town basket increased by R75.90 (1,7%) and R308.67 (7,5%) year-on-year, to R4 430.42 in April 2022
  • The Springbok basket increased by R225.37 (4,8%) and R449.46 (10%) year-on-year, to R4 960.01 in April 2022
  • The Maritzburg basket increased by R98.31 (2,3%) and R449.65 (11,6%) year-on-year, to R4 335.83 in April 2022

35/44 foods in the basket increased in price.

The significant increases (5% and above) are: cooking oil, potatoes, beef, fish, spinach, cabbage, green pepper, tinned pilchards, bananas, polony, and apricot jam. Increases, also including maize meal, cake flour, rice, white sugar, samp, eggs, milk, frozen chicken portions, margarine, peanut butter, bread; and curry powder, stock cubes.

The cost of the household food basket continues to rise. Factors (global and local) impacting on the plate include the war in the Ukraine, the high brent crude oil price, the high fuel price, and a weak exchange rate. Much higher production and logistical costs will continue to drive prices upwards and are likely to continue rising for the rest of 2022. The recent flooding in KwaZulu-Natal (not accounted for in this April data – prices collected before the rains) will add to these increases going forward.

Statistics South Africa’s latest Consumer Price Index for March 2022 shows that Headline inflation was 5,9%, and for the lowest expenditure quintiles 1-3, it is 6,7%, 6,4% and 5,7% respectively. CPI Food inflation was 6,6%.

Responses by retailers

At the retail level, supermarkets have responded by rounding on the higher food prices by bringing in a lot of new cheaper brands, offering shop brands, offering specials (some unbelievable), offering ‘combos’ (maize meal, rice, flour, sugar, oil; potatoes, onions, carrots etc.), offering store cards, according to the study.

The index goes on to say that, most families now only buy the basic of the most basic foods. There is nothing to cut back. There is no behavioural change to make. There is no space to manoeuvre on the family plate. The space that is left is on finding a cheaper priced food. This space is the domain of the retailers.

Household domestic and personal hygiene products

The April 2022 Household Domestic & Personal Hygiene Index shows an increase of R26.44 (3,5%) month-on-month, with the total average cost of the products being R785,84 in April 2022.

This is a big monthly jump in the index. Increases were across the board, and included: green bar soap (9%), washing powder (10%) and bath soap (5%); toilet paper, toothpaste, Vaseline, cream, Handy Andy, dishwashing liquid, deodorant, and sanitary pads. The escalation in price of green bar soap, in particular, has raised concern. This long bar of magic green soap can do almost anything related to cleaning of bodies, clothes, dishes, homes; and simply must be bought.

The cost of basic hygiene products is high. These products compete in the household purse with food. These products are essential for good health and hygiene. Not much notice is taken on how women find the money to buy these products, and yet these are essential for good health, and hygiene; but also, in having a sense of dignity, being able to function in society and being accepted.

Year-on-year the household domestic and personal hygiene products index increased by R68.07 (9,5%) bringing the total average cost of basic household domestic and personal hygiene products to R785.84.

Workers

The National Minimum Wage is R23,19 an hour and R185,52 for an 8-hour day. April 2022, with a short working-day month of 18 days, the maximum National Minimum Wage for a General Worker is R3 339.36.

Transport to work and back will cost a worker an average of R1 152.00. Electricity will cost a worker an average of R731.50. A basket of basic but nutritious food, for a family of 4 persons, will cost a worker R3 139.37. Together these three core expenses come to R5 022.28.

Because food is bought after monies for transport and electricity have been paid for or set aside, in April 2022, the index calculates that workers’ families will underspend on food by a minimum of 53,6% this month

The study goes on to add that the majority of South African workers do not earn enough money to cover their basic expenses each month.

It means that in a crisis, there is no savings buffer. The spikes in the food basket are not being absorbed by workers, because there is no extra money to pay for the higher prices. Instead, workers cut back further on their family’s basic consumption, get sick more often, are more stressed and distracted, are less productive; and have less money to spend, and spread in the broader economy.

 

Food, goods prices set to soar

Source: IOL

South African consumers have been warned to brace for even higher prices this year as global supply chain backlogs are showing no signs of easing and are likely to worsen for the rest of 2022.

This comes as the Food and Agriculture Organisation (FAO) on Friday said that world food prices jumped 12.6 percent in March to a new record high, largely driven by conflict-related export disruptions from the Russia-Ukraine war.

The UN agency’s food price index, which tracks the most globally traded food commodities, averaged 159.3 points in March, compared to an upwardly revised 141.4 points in February.

The war between Russia and Ukraine – two major exporters of wheat, maize, barley and sunflower oil via the Black Sea – caused turmoil in the food markets as supply for staple grains and edible oils stalled. According to the FAO, the biggest price increases were reported for cereals due to a surge in prices of wheat and coarse grains and vegetable oils, fuelled by reduced export supplies amid the ongoing conflict in the Black Sea region and an already tight global availability of wheat, sunflower, palm, soy and rapeseed oils.

The meat index was up 4.8 percent, also hitting an all-time high with pork prices rising the most on record since 1995 due to supply shortfalls in Western Europe and a surge in internal demand in light of the upcoming Easter holidays.

Dairy prices increased by 2.6 percent due to inadequate milk output in Western Europe and Oceania to meet global demand, while sugar rose 6.7 percent, reversing most of the previous three months’ decline. Cargo Compass, a South African freight, logistics and warehousing company that operates worldwide, on Friday said goods prices would also rise sharply in South Africa as supply chain bottlenecks were here to stay for 2022.

Chief executive Sebastiano Iorio said at the start of the year they were hopeful that trade bottlenecks would ease this year, but they seem to be getting even more severe. “Prices of consumer goods like electronics and clothing, including imported basic food products, are certainly going to keep rising,” Iorio said.

“Shortages will have a significant impact on an already fast rising inflation rate.”

Headline inflation in South Africa for 2022 has been forecast upward from 4.9 percent to 5.8 percent, primarily due to the higher food and fuel prices, triggering a tighter monetary policy.

Lorio said that it was not only supply shortages that presented a problem, but rapidly rising freight charges were adding to dramatic price rises in shipped goods.

He said freight rates of South Africa’s three biggest trading blocs – China, the US and the Eurozone – were rising rapidly between 33 and 40 percent over the past 2 years. Iorio said freight costs had risen sharply because of higher oil prices in part driven by the war in Ukraine, the synchronised reopening demand “shock” to global economies, trucker shortages in Europe and the closure of several Chinese ports due to the re-emergence of Covid-19.

“Two years ago, freight rates for a standard 12-metre container from China were $2 000 (R29 280) to transport via sea to South Africa.

“Today it costs $14 000, an increase of more than 500 percent,” he said. Investec chief economist Annabel Bishop said elevated inflation remained a concern for both real incomes and consumption this year, with food prices, and transport costs showing upwards pressure. Bishop said sharply rising prices negatively impacted consumer affordability and so economic demand and, therefore, economic growth. “Higher costs of non-durable goods, which are typically necessities, reduces spend on other items, in the absence of markedly higher real wages,” Bishop said.

“Food on its own has the largest weighting in the cost of living calculation in South Africa.

“Fiscal support has reduced the impact of potentially higher fuel prices, and retailers may limit basic bread and cereal price hikes, but households will face a higher inflation and interest rate environment this year compared to 2021, and likely even higher interest rates in 2023.”

 

Petrol breaks R20/litre mark

By Jason Woosey for IOL

South African motorists and commuters are facing a full blown crisis with both petrol and diesel set to go up by a massive margin from 1 December, pushing the petrol price past R20 per litre for the first time ever.

According to the Department of Mineral Resources and Energy, both grades of petrol will go up by 81 cents per litre from Wednesday, December 01, while 50ppm diesel will increase by 74 cents and 500ppm by 72 cents. Illuminating paraffin will rise by 42 c/l.

The December fuel price adjustment will see the cost of 95 Unleaded Petrol rising to R19.63 per litre at the coast and R20.35 in the inland regions, where 93 Unleaded will rise to R20.13.

The wholesale price of diesel will increase to R17.30 at the coast and R17.92 in Gauteng, keeping in mind that the unregulated retail prices (which vary between outlets) will be somewhat higher than that.

What is driving the price higher?

The price of Brent Crude oil increased marginally during the month of October, from an average of $82.50 per barrel to $83.00. This alone would not have made a big difference to the December fuel price, however, the rand depreciated from an average of R14.72 in the previous month to R15.85 this month, the energy department said. The Slate Levy, which is used to compensate the industry for cumulative under recovery, also saw an increase of 26.30 c/l.

Fuel taxes and levies currently account for R6.11 per litre of fuel, a fact which is proving increasingly controversial as higher oil prices and a weak rand drive prices up on a monthly basis.

Earlier this year, Outa released a graphic showing that more than 50% of the cost per litre of petrol is made up of levies:

Petrol drives food prices ahead of Christmas

Source: Supermarket & Retail

This week, the price of petrol increased to a record R19.54 by R1.21 a litre, an increase that will exacerbate the already high cost of food, analysts say.

“The recent fuel price does not bode well for the inflation profile in the short- to medium-forecast horizon, particularly food inflation. This is also exacerbated by the fact that there are other cost-push pressures, like fertiliser costs and electricity costs,” Kulani Siweya, Agri SA’s chief economist, told Business Insider SA.

He said the uptick in retail prices might come as a result of retailers charging more to account for the higher transportation and distribution costs that come with continued fuel hikes and other factors.

Paul Makube, a senior agriculture economist at FNB, said the higher fuel price will affect all agricultural produce but will mostly impact fresh produce and meat products given their sensitivity and frequency of distribution.

“Going into the festive season, we are expecting food prices to remain elevated as meat prices are expected to remain firm on strong demand that comes with the festive season as well as lower slaughter numbers and rising world prices as we have seen play out this year,” Siwela said.

He said that prices for chicken, which have also remained high due to strong global prices, may remain elevated.

Currently, meat prices are already being pushed up by high production costs and rising feed costs. Weaner calf prices are 13% higher than they were last year at this time.

A kilogram of class A beef averages around R53.46 and has increased 3.5% year-on-year, while class C beef has risen by 8% to R45.64. While lamb and mutton prices are generally lower than last year, they are still 11% over the three-year average for this time of the year.

Poultry prices have risen 22% since last year at the same time for fresh whole birds, while frozen chicken has risen over 15%.

On the vegetable front, butternuts are currently averaging R7,00 a kilogram, while cabbages cost R2.28 and onions, R2.72. Potatoes cost around R6,39 for a kilogram, while tomatoes are R8,13.

Other factors contributing to higher food prices include global food prices on the rise that are spilling over into the domestic market and electricity inflation, Siwela said.

The global shipping crisis has also caused financial constraints and, in some cases, delayed the arrival of critical input products such as pesticide and herbicide, which South Africa imports close to 80% of, Makube said.

“Internationally, the supply chain crisis impacted on the distribution of raw products to manufacturing plants. Manufacturing plants could not get the right ingredients on time due to the logistics and the supply chain crisis which we’ve been having,” he said.

Makube said an adequate supply of food expected for the festive season might be able to offset the impact of the fuel hike on the price of food.

 

Vodacom slashes data prices by up to 40%

Source: Tech Financials

Vodacom has cut data prices by up to 40% and will provide free data to access essential services through Vodacom’s zero-rated platform ConnectU with immediate effect.

The value of these initiatives is some R2.7-billion over the next year.

Vodacom’s various 30-day data bundle prices will be cut across all of its channels by up to 40%, providing customers with even greater value and making it more affordable to connect.

30-day bundle size price reduction

  • 50MB R12 – cut by 40%
  • 150MB R29 – cut by 33%
  • 325MB R55 – cut by 33%
  • 500MB R79 – cut by 21%
  • 1GB R99 – cut by 34%
  • 3GB R229 – cut by 23%
  • 5GB R349 – cut by 14%
  • 10GB R469 – cut by 22%
  • 20GB R699 – cut by 31%

Jorge Mendes, Chief Officer of Vodacom’s Consumer Business Unit, says: “Vodacom can play a critical role in supporting society during this challenging time and we’re committed to doing whatever we can to help customers stay connected. Since we started our pricing transformation strategy three years ago, our customers have benefitted from significant reductions in data prices and the cost of voice calls. Over the same period, we invested over R26 billion in infrastructure and new technologies, so our customers enjoy wider 2G, 3G and 4G coverage and vastly increased data speeds.”

The latest data reductions will complement the discounted bundle offers that will also be made available to prepaid customers in more than 2,000 less affluent suburbs and villages around the country. For qualifying communities to access further discounted voice and data deals, they need to simply click on the scrolling ConnectU banner on the platform via connectu.vodacom.co.za

ConnectU – which is a zero-rated platform – also goes live today. It will provide content aimed at social development and offers a variety of essential services for free. Learners and students enrolled in schools and universities can access relevant information for free, with no data costs.

The ConnectU portal includes a search engine linked to open sources such as Wikipedia and Wiktionary as well as free access to job portals; free educational content on the e-School platform; free health and wellness information and free access to Facebook Flex, the low data alternative to Facebook that enables customers to stay socially connected.

Vodacom’s popular Just4You platform has been a significant contributor to the approximately 50% reduction in effective data prices over the past two years. Substantial cuts in out-of-bundle tariffs and the introduction of hourly, daily and weekly bundles with much lower effective prices have also driven increased value and affordability, resulting in R2 billion in savings for customers in 2019.

This latest announcement is part of Vodacom’s social contract with the public and has been extensively discussed and agreed with the Competition Commission.

“Today’s price cuts and free access to ConnectU will also assist South Africans during the national state of disaster while at the same time helping to drive greater digital inclusion,” concludes Mendes.

DStv announces annual price increase

DStv has announced pricing increases on some of its packages for 2020, while others will remain at the previous year’s prices.

The updated fees, will take effect from 1 April, are as follows:

  • DStv Premium – a R10.00 (1.24%) price increase
  • Compact Plus – a R10.00 (1.93%) increase
  • There will be no increase for Compact subscribers

Premium subscribers declined to 20% from 22% in the previous financial year, due to tough economic times and stiff competition from international video streaming services.

Meanwhile, a recent poll run by BusinessTech found that around 13% of South Africans were willing to cut access to services like DStv to cut costs each month.

Food prices set to rise during 2019

By Dean Hutton for Bloomberg/Business Insider SA

Shoppers at Shoprite, Woolworths and Spar saw only small increases in food prices last year. But Shoprite is warning that prices could head higher in coming months.

Comparing prices at Shoprite and Checkers now, versus a year ago, there remains little evidence of price pressure.

Amid all the other pressures in the economy, food inflation has been the one relatively happy place the past year.

In its results this week, Shoprite reported that its prices only went up by 0.4% in the six months to end-December.

Woolworths said its food prices only increased by 1.2% in the same period, while Spar food price rose by only 1.4% – and the retailer says prices continue to fall across a wide range of grocery and perishable items.

In December, some 10,719 items in Shoprite and Checkers stores were cheaper than a year before.

The most notable price drops were among basic commodities such as frozen chicken portions, sunflower oil, rice, fat spreads and UHT milk across all our supermarket brands, a spokesperson told Business Insider SA.

However, the food price party could be drawing to a close.

In September last year, more than 11,600 items at Shoprite and Checkers were cheaper than a year ago, indicating that prices of almost 1,000 products have stabilised by December.

Shoprite itself is warning that prices will start to pick up. “The price of maize meal has already started increasing, which in turn will impact the cost of chicken feed,” the spokesperson said.

At the height of South Africa’s extreme drought in 2016, the white maize price reached R5,000 a tonne – which pushed up food inflation to more than 7%. However, following good rains in many parts of the country, the maize price fell to below R2,000 a tonne. Of late, however, the maize price is back around R3,000 amid renewed drought concerns.

“(Also), the price of sugar has traditionally over the past years increased in the first quarter of the year and we expect this increase to still be implemented,” Shoprite said. “Other categories to be affected will depend on factors such as inflated supplier prices, exchange rates, etc.”

Comparing prices at Shoprite and Checkers now, versus a year ago, there is little evidence of price pressures, however.

For now, the price of Huletts white sugar (2.5kg) remains unchanged at R34.99 from a year ago, at Shoprite.

The price of Ace Super Maize Meal (10kg) has actually fallen to R48.99, from a year ago (R52.88). A coffee brand like Frisco (750g) is also cheaper now (R54.99) than a year ago (R59.99). At Checkers, prices were also largely in line with twelve months ago, with some products like Sir Fruit juice falling from R29.99 to R25.99

The only big increase we could find was in sunflower oil, with the Helios brand (5 litre) up from R74.99 a year ago to R79.99

By Jason Felix for IOL

In a first gut punch for consumers for 2019, Eskom is asking the National Energy Regulator (Nersa) for a 45% electricity increase spread over three years.

Public hearings on Eskom’s demand for a 15% electricity tariff increase over the next three years will start in Cape Town next week and advocacy groups are seeing red, saying government’s timing was a clear sign that it wanted increases pushed through.

This increase is on top of the 4.41% hike that was already granted to Eskom by Nersa. Eskom has argued that this 15% increase was needed to ensure that it maintained its stability and growth trajectory.

But Energy Expert Coalition’s Ted Blom said Eskom’s application should be scrapped as the still-captured and corrupt utility should not be granted any increases until a full forensic audit was completed.

“As we now enter 2019, Eskom is rudderless. The Eskom board has proved to be dysfunctional and required ministerial intervention on several occasions. Although appointed 12 months ago, they were unable to carve out a credible turnaround plan despite the use of expensive outside consultants,” he said.

Last year, President Cyril Ramaphosa intervened in the crisis at Eskom by appointing a team of eight to steer the board in the right direction by January 31 this year.

“The many futile interventions point to an unsalvageable and bankrupt Eskom. In fact, the pillaging is still continuing, this time by another ‘third force’ which has replaced the Zupta gang. Questions remain as to why no one has been prosecuted and no monetary recovery has occurred,” Blom said.

Nersa said it had received Eskom’s third Multi-Year Price Determination Regulatory Clearing Account (RCA) Year 5 (2017/18) application totalling R21 million and fourth Multi-Year Price Determination application totalling R219 billion, R252bn and R291bn for the 2019/20, 2020/21 and 2021/22 financial years respectively.

The energy regulator said that it would assess Eskom’s applications following due regulatory processes.

Eskom said that it continued to implement a short-to medium-term 9-point recovery programme that would see steady and sustained improvement in plant performance and coal stock levels.

It added that steady progress was made with regard to fixing coal stockpiles as 35 new coal contracts were concluded in the last year.

It also said the probability of load shedding remained low until January 13.

Stop CoCT founder Sandra Dickson said the timing of the public hearings showed that the increases should be rubber stamped.

“It is the worst decision to hold public hearings so early in the January. We also need to state that consumers cannot pay these exorbitant increases. It just does not work.

“The average family earns about R15 000 and more. For all that money to go to the City and to Eskom is absolutely criminal. People cannot survive,” she said.

Dickson said although Eskom had problems, its cash flows remained important. “They should get an increase but nothing above the current inflation rate… We need Eskom to run properly but cannot expect people to pay such high rates,” she said.

Public hearings on the increases will be held on January 14 at the Southern Sun Cape Sun Hotel in the city between 9am and 5pm.

Vodacom’s new trading update has revealed quite a few interesting facts about the network giant. Let’s take a look at some of the things that stood out most.

The latest trading update from Vodacom has revealed that its service revenue in South Africa has grown by 4.9% to just over R14 billion. It seems they are also making quite a bit in terms of every South Africans least favourite word: “data”.

MyBroadband reported on the statement that explained that Vodacom had added huge amounts of new customers last year.

“We continued to see strong customer growth, adding 1.6 million customers in the quarter as we attracted new customers through our bundle and segmentation strategy,” said Vodacom.

While South Africans continue to complain about the ridiculous data costs here at home compared to other developing countries, data revenue grew by 8.7% for Vodacom. That increased brought the total data revenue to R6.0 billion, making up 42.3% of service revenue.

While data traffic growth on Vodacom’s SA network is slightly down from the previous quarter, overall traffic growth kept stable at 43.9%

Vodacom’s steps to reduce free data usage was the main reason for the decline. While we may say we hate bundles, the network says they are becoming ever more popular.

Vodacom was also keen to stress that the overall effective price it charged per megabyte was down just under 25% in the quarter.

The network says the money it makes is focussed on enhancing the quality of coverage across the country.

“During this quarter, our capital expenditure of R2.3 billion was focused on maintaining our best network advantage and enhancing our IT systems and deep learning machine capabilities,” said Vodacom.

Across the Vodacom network, 77.6% is LTE or 4G population coverage. 3G covers 99.4% of the network.

After MyBroadband first reported the R2 billion news, South Africans across social media were furious that the network giant was bringing in such large amounts off of their data.

By Nic Andersen for The South African

The Amazon con

When Alexander Turney Stewart opened a brand new store in New York in the 1820s, he adopted a radical and original policy.

All goods had a fixed price. No longer would salesmen size up the apparent wealth of a customer and see how much they could get away with charging.

Rival retailers predicted the Irishman would be bankrupt within a week. Instead, he became a multi-millionaire and A. T. Stewart & Co was, for some time, the world’s biggest department store.

The idea that shops charge a set price for goods has been the norm for almost 200 years — but that’s changing thanks to the internet.

Most of us assume that prices at Amazon, the online retail giant, are not just low, but stable.

However, remarkable new analysis of the price of 100 random products during the course of year showed prices fluctuated by up to 260 per cent between the highest and lowest points, leaving customers who bought at the wrong time hundreds of pounds out of pocket.

The research, using data from CamelCamelCamel, a price-tracking website, found that a paddle board, for example, could be bought for as little as £234.87 or as much as £699 — a difference of £464.13 over a year.

A Jamie Oliver stainless steel induction saucepan changed price 51 times between first going on sale on Amazon in November 2016 and August this year, ranging in price from £44 to £18.27.

New analysis of the price of 100 random products during the course of year showed prices fluctuated by up to 260 per cent between the highest and lowest points, leaving customers out of pocket.

Some prices changed by large amounts on a weekly basis. On average, each product changed price every five days and one product changed price 300 times in a year. For example, the DVD of Stephen King’s 1990 thriller It changed price 24 times a month.

This strategy of prices moving up and down on a regular basis — and in real time — is known in the industry as ‘dynamic pricing’.

It is a technique that has long been used in the airline industry to sell as many seats as possible, as profitably as possible.

Some consumers have also experienced it with Uber, the app-based minicab company, which offers low fares compared with black taxis most of the time, but which sometimes adopts ‘surge pricing’ during periods of high demand.
Dynamic pricing is increasingly being used by online retailers, particularly Amazon.

Philip Downer is the former managing director of Borders, the High Street bookstore chain that faced fierce competition from the online giant.

He now runs small gift shops in Dorking, Surrey, and follows Amazon developments closely.

‘This price instability means the only certainty is that you can never be certain you are getting the best price for anything,’ he says.

‘Indeed, you probably never are getting the best price for anything. One senses as a consumer that they are playing games with you.’

Earlier this month, Amazon in the U.S. came under fire for allegedly using dynamic pricing to take advantage of Hurricane Irma.

Customers in storm-hit Florida took to social media to complain that packages of Nestle water were selling for $25 on Amazon, yet prices for those in the north-east of the country showed the same case of water selling for $18.50.
Amazon strongly denied that it was adopting ‘surge pricing’ for bottled water and insisted it did not alter prices according to the area of the country.


That, in turn, was leaving higher-priced offers from third-party sellers that use Amazon.

However, there is strong anecdotal evidence that all online retailers, not just Amazon, tweak prices of some products according to supply and demand.

Another price-tracking website is Idealo, which monitors 183 million live prices across 30,000 shops in Europe, including Amazon, Argos, John Lewis and Asos.

Over the course of three months, it studied a selection of consumer electronics, such as Fitbit fitness devices and computer games, to see how the average price fluctuated throughout the week.

In nearly all cases, prices were lower on a Monday or Tuesday — the least popular days of the week to shop online, according to retailers, and they were more expensive in the run-up to the weekend, when the bulk of online shopping takes place.

For instance, the average price of a Fitbit Charge HR was £89 on a Monday but £94.64 on a Saturday. Call of Duty: Black Ops III, a computer game, cost £12.49 on a Monday but £16.99 on a Friday and Saturday.

The average difference between a Monday and Saturday across all video games is 15 per cent, according to Idealo.

The price difference for a selection of four family games, including Monopoly and Articulate, was 18 per cent depending on the day of the week.

‘It is supply and demand driven, absolutely,’ says John Hoad at Idealo, which is based in Germany.
‘Just look at the Lego Millennium Falcon, which is a marriage of two very popular toy trends: Lego and Star Wars.’

On May 2, it was priced, on average, at £81.66 across all the retailers it monitors, including Amazon. On May 3, the day before so-called Star Wars Day, which occurs each year on May 4 and is hugely popular with fans, it shot up to £94.90, a 16 per cent leap — ‘a simple case of taking advantage of demand around Star Wars Day,’ says Hoad. On May 5, the price went back down to £83.99.

A retailer is perfectly within their rights to fluctuate prices according to supply and demand, but consumer experts worry that retailers have the potential to take it a step further.

With all the data that online retailers hold on customers, could they alter the prices according to who was doing the shopping?

In 2012, a Wall Street Journal investigation discovered online companies, including office-supply shop Staples and furniture retailer Home Depot, showed customers different prices based on ‘a range of characteristics that could be
discovered about the user’.

Customers, for instance, in locations with a higher average income — and perhaps more buying choice — were generally shown lower prices. Another study, in Spain, showed that the price of the headphones Google recommends to you in its ads correlated with how budget-conscious your web history showed you to be.

The travel site Orbitz made headlines when it was revealed to have calculated that Apple Mac users were prepared to pay 20 to 30 per cent more on hotels than users of other computer brands, and to have adjusted pricing accordingly.

Ratula Chakraborty, senior lecturer in business management at the University of East Anglia, and an expert in pricing, says: ‘So-called first-degree price discrimination, when prices are aimed at the individual by identifying them, is a very contentious subject, as Amazon found to its cost several years ago when it started trialling targeted higher prices to consumers based on their shopping history, which it could monitor.’

This was back in 2000, when online retailing was just taking off. Amazon was found to have charged some people more than others for the same DVD, with some alleging that older people were charged a higher price.

Within a fortnight Amazon was forced to apologise, issue refunds and strenuously state it never tests prices based on customer demographics.

An Amazon spokesman reiterated its position to the Mail this week, saying it might alter prices according to a customer’s location but does ‘not engage in surge pricing or vary its prices by demographics. Retail prices fluctuate all the time, and we simply seek to meet or beat the lowest competitive price for our customers.’

But, as Chakraborty makes clear, it is increasingly easy, in theory, for online retailers to use data they have gathered to change prices according to the customer.

Every time you visit a website, the company behind it downloads a tracker onto your computer, known as a cookie. These monitor what pages of the website you use and how frequently you click on a particular page.

In addition, in nearly all cases you have to hand over your email address to an online shop when you make a purchase; this can then be easily linked to your actual postcode, and other details available about you online, which in turn can be used to estimate your wealth thanks to large consumer databases that segment the population of Britain into about 60 different socio-economic categories.

John Readman, marketing director at Summit, a company that helps online retailers use this sort of customer data to boost their sales, says: ‘What’s fascinating with dynamic pricing is the amount of audience data that is now available to retailers, as consumers move around the internet.

‘Potentially, an unscrupulous or profit-hungry retailer could change the price of a product based on how much they want that product. That is technically possible.’

He insists that no retailer he has ever worked with has used data in this way to profiteer.

Instead, ‘it’s more about reducing the price to returning customers or to loyal customers to get them over the line’.
In other words, most retailers want to convert a browser into a buyer rather than make a bit more profit out of an individual buyer.

What is revealing, however, is how Readman shops online.
He does his initial searches for high-value products and then makes his purchases using an ‘incognito logged-out browser’.

This is a button most web browsers, such as Chrome or Internet Explorer, have (see box above for how to find this). Once clicked, users can visit web pages without the sites being able to track the identity of the consumer.
‘I have certainly seen different results from when I am logged in than when I am on an incognito browser,’ says Readman.

He says this is mostly true for travel and hotel websites, but he has also spotted different prices for the same product on Amazon.

Amazon’s strength is in ‘bundling’, he adds.

He is referring to the practice by which once you’ve selected your purchase, up will pop a selection of related items that, apparently, are ‘frequently bought together’ by other customers, in order to tempt you further.
‘Nearly 10 per cent of all their sales come from that extra bundling,’ Readman says. ‘I wouldn’t be surprised if they are not showing you the cheapest one on the bundle, but the one they are making the most [profit] margin on.’

In the UK, only £16 in every £100 is spent online. But dynamic pricing could soon enter the High Street thanks to technology called electronic shelf-edge labelling.

A number of retailers have started to experiment with electronic displays, rather than paper labels on their shelves.
Andrew Dark, is the chief executive of Display Data, which has developed electronic labels which are so high resolution they look like a printed ticket.

‘People can’t work out it isn’t paper,’ he says. The main benefit of this technology for retailers is cost-cutting.
Display Data has worked with both Morrisons, at its Guiseley branch in Leeds, and Tesco, at Braintree in Essex, to install a trial of electronic price displays.

‘It means the retailer doesn’t have to laboriously print a label, get a human being to cut it out, walk it to a specific location in an aisle and put it in the shelf,’ says Mr Dark.

‘Changing 50 items in 1,000 stores just isn’t easy to do manually. If you speak to store colleagues, they hate it. It’s so laborious.’

His system allows someone to change the price in thousands of stores within 17 seconds with the push of a button.
The supermarkets are adamant that they have no intention of using ‘dynamic pricing’ to push up the price of bottles of wine to commuters in the evening, for instance, or the price of umbrellas when it is raining.

A source close to Morrisons said: ‘Our customers would murder us if we did that. Yes, it’s technically possible, but as it is so competitive out there, we would be crazy to try this.’

However, electronic shelf-edge labelling has been used to cut prices throughout the day, explains Dark, one of whose customers is Kaufland, a large supermarket group based in Germany, which uses it particularly to encourage customers to buy fresh fruit and vegetables near to their use-by dates.

‘We buy so much with use-by dates and if it doesn’t get sold, it gets thrown away. That’s one of the biggest drivers in dynamic pricing: to reduce that wastage by lowering prices,’ he says.

Mr Dark believes that major British supermarkets as well as DIY shops and electronics stores will start to adopt the technology.

‘This is no longer a trial. The system works. You will see chains roll out this technology from the end of this year; you will start to see mass deployment across various UK retailers.’
If customers really do benefit, by seeing more promotions and discounts towards the end of the day, undoubtedly they will cheer this development.

But so much of dynamic pricing, especially online, with the continual fluctuation of prices, seems designed only to confuse the consumer. As Mr Downer says: ‘What I can’t stand is the message you get from politicians that if you are ripped off it is somehow your fault for not shopping around.

‘As if people have the time, let alone inclination or capability, to do all this.’

By Harry Wallop for The Daily Mail

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