Hopeful Signs of Downward Trend in Supermarket Prices - CHOICE #450

After two consecutive years of rampant inflationary prices at supermarket chains, it seems finally the rising price trend has come to a halt last year.

According to the annual supermarket price survey of the Consumer Council, price fluctuations of a basket of 200 top-selling supermarket items were exceptionally moderate last year - only a mere 0.9% rise on aggregate average.

This was in sharp contrast to the steep climb in average prices in 2011 and 2012 which saw the basket of goods surveyed rise by 5.1% and 6.8% respectively. It was, in fact, the best performance with the least increase on record in 5 years since 2009 (3%).

The survey, in its tenth year, analysed the price information from the scan data (sales value and quantity sold) collected from three major supermarket chains across the territory: CRVanguard, ParknShop Supermarket and Wellcome Supermarket.

In the analysis, the 200 items were broadly divided into 12 main categories and sub-divided into 42 sub-categories (product groups). For instance, the staple food category comprises rice and edible oil, while the dairy products/eggs category consists of milk, yoghurt/yoghurt drinks, cheese, butter, ice cream and eggs.

The increases or decreases on price were computed on an aggregate average basis.

According to the survey, the average price of two-thirds (8 out of 12) of the main categories rose from 0.04% to 6.8% last year. Prepacked bread/cake and dairy products/eggs recorded the most increases of 6.8% and 4.6% respectively.

In the preceding year, 11 categories were up in price; the one exception was the alcoholic drinks category comprising wine and beer.

On the sub-categories, the analysis showed more than half (25 out of 42) were up in price from 0.4% to 11%, with only one double-digit increase in the product group of prepacked cake (11%), unlike 2012 when there were 6 in the double-digit increase bracket.

Other product groups with notable increase were: cheese (7.5%), ice cream (6.9%), juice/juice drinks (6.2%), yoghurt/yoghurt drinks (6.2%).

On the other hand, 16 product groups were down in average price from 0.1% to 4.5%, notably, infant diapers (-4.5%), soya drinks (-3.8%), beer (-3.6%), shampoo (-3.5%), children and adult milk powder (-3.2%). Prepacked soup was the only one product group with no price change.

The statistics revealed in the survey offer some interesting insight on such issues as product pricing and consumer choice affecting one's cost of living.

For instance, in the product group of prepacked cakes, one product increased in price by 13.7% compared with a much lower 4% and 6% respectively in two other products.

In another instance, the average price of the infant formula product group rose by 4%. Though moderate compared with 17.3% in 2012, two products of the same brand in the group were found to actually hike up 15.2% and 15.4% respectively.

You saved considerably if you happened to regularly buy infant diapers which had the distinction of being the product group with the most decrease in average price last year - down by 4.5% after a double-digit increase of 10.5% the year before.

And if your diet had a large proportion of canned fish and canned meat, you were quite unaffected. Canned fish was down 0.2% while canned meat up 1.2% last year, compared with a considerably higher 18.1% and 12.4% increase respectively in 2012.

Eggs, one of the fastest selling items in supermarkets, recorded double-digit increases for three consecutive years since 2010, pushing up egg prices to new highs, but finally took a sharp turn, much to the delight of consumers, with a decrease of 0.4% last year.

Further, if your daily staple was rice rather than bread, you probably paid less for rice consumption in 2013 because the aggregate average price came down 0.5% while that for prepacked bread shot up 3%.

The advice it seems is that smart consumers should always make effort to shop around at different retail outlets for price as well as brand comparison. And review your consumption choice if savings are important to your financial well-being.