Presentation Transcript

1. National African federated chamber of commerce and industrytownship monitor IndexPilot PHASE

2. Agenda

   Introduction Sample Key Findings Objectives Detailed Findings Appendix

3. Introduction (I)

   TMS Research was commissioned by the National African Federated Chamber of Commerce (NAFCOC) to track the prices of a selected ‘basket of goods’ that are consumed on a regular basis in the township areas. The ‘basket of goods’ is made up of products consumed on a regular basis. (e.g. bread, milk, mealiemeal, eggs, etc.) Focus will be on the price of this ‘basket of goods’ in the following stores: Locally owned retail shop - “Spaza” shops Foreign owned retail shop - Somalian Owned Large retail stores - Pick n Pay & Shoprite

4. Introduction (II)

   Stores in 3 different types of townships were to surveyed: Formal township - Soweto Less formal township - Diepsloot Rural township - Sebokeng A final sample of 19 stores was achieved. In order to achieve the sample, project scoping was done in 3 townships that were chosen. Two waves were conducted: WAVE I at the end of September and WAVE II during the middle of October. The purpose of this presentation is to compare findings in both waves and make note of any significant differences.

5. Agenda

   Introduction Sample Key Findings Objectives Detailed Findings Appendix

6. Objectives

   To investigate the brand selection in each store type as well as their prices to ascertain how much choice the consumer has. To take note of any promotions / specials that may be on offer for any of these products also look at trends in this regard. To take note of whether or not the price is visible on the products, and if this impacts pricing / re-pricing i.e. how quickly does a store respond to a change in cost price. To take note of any brand changes over time in a particular store and if this results in a increase or decrease in the price.

7. Agenda

   Introduction Sample Key Findings Objectives Detailed Findings Appendix

8. Sample: Overall (I)

   The following sample was attained for both waves 1 and 2 Source: TMS Research, October 2013

9. Sample: Overall (II)

   The table below indicates stores changes between waves 1 and 2. Stores needed to be replaced as store owners were no longer willing to participate in the study Source: TMS Research, October 2013

10. Sample: Soweto

    The tables below indicates different areas where the study was conducted in Soweto township for both waves 1 and 2. Wave 1 Wave 2 Source: TMS Research, October 2013

11. Agenda

    Introduction Sample Key Findings Objectives Detailed Findings Appendix

12. Key Findings: General

    Most “Spaza” shops are located in residential areas. The home owners usually turn a part of their houses into a “Spaza” or have a container inside their yard. Though there are some Foreign Owned shops located in residential areas, majority of them are usually located in busier locations like on the main road, taxi rank, near a mall etc. Majority of Foreign Owned shops are flashy looking, brightly painted with lots of signage on the walls of brands like Coca Cola, Parmalat, Ariel, Omo, Soft n Free, Koo etc. In most cases, Foreign Owned shops have a greater brands selection for a specific product than those sold in “Spaza” shops. In Foreign Owned stores and “Spaza” shop prices are not visible and consumers need to ask for them. Furthermore, there are no promotions in these types of stores. Source: TMS Research, October 2013

13. Key Findings: Products (I)

    On average toilet paper and eggs are most expensive at Retailers compared to “Spaza” shops and Foreigner owned stores. This could largely be due to the fact that eggs are sold separately in these kinds of stores. Furthermore, there is less focus on the brand names. Both white and brown bread are generally cheaper in Foreigner owned stores. White bread is generally more expensive in “Spaza” shops. Furthermore, brown bread is more expensive in Retail stores. In most cases Foreign Owned stores and “Spaza” shops have cheaper brands available for bread - these are priced between R5 and R6. Milk is more expensive in “Spaza” shops. Margarine is pricy in “Spaza” shops and Foreign Owned stores that only sell the “Rama” brand. Cheaper brands are better substitutes in this store however they are not always available. Source: TMS Research, October 2013

14. Key Findings: Products (II)

    Tinned baked beans are much more expensive in Foreigner owned stores and “Spaza” shops than at the Retailers. With regards to Tinned pilchards ,In Foreign Owned stores and “Spaza” shops prices are fairly similar between waves. Biscuits in general have cheaper brands that are available in most Foreign Owned stores and “Spaza” shops priced between R5 to R6.50. The most popular brand for rice is Tasticacross all store types. Disposable nappies are the cheapest in the Retail stores. Source: TMS Research, October 2013

15. General Findings across Townships

    Source: TMS Research, October 2013

16. Wave Overview

    Wave 1 Wave 2 Source: TMS Research, October 2013
17. Indicates LOWEST average price of wave

    Quick Price Overview (I)

    Indicates HIGHEST average price of wave Source: TMS Research, October 2013, Note: The price shown is the average price Wave 2 Wave 1
18. Indicates LOWEST average price of wave

    Quick Price Overview (II)

    Indicates HIGHEST average price of wave Source: TMS Research, October 2013, Note: The price shown is the average price Wave 2 Wave 1
19. Indicates LOWEST average price of wave

    Quick Price Overview (III)

    Indicates HIGHEST average price of wave Source: TMS Research, October 2013, Note: The price shown is the average price Wave 2 Wave 1
20. Indicates LOWEST average price of wave

    Quick Price Overview (IV)

    Indicates HIGHEST average price of wave Source: TMS Research, October 2013, Note: The price shown is the average price Wave 2 Wave 1
21. Indicates LOWEST average price of wave

    Quick Price Overview (V)

    Indicates HIGHEST average price of wave Source: TMS Research, October 2013, Note: The price shown is the average price Wave 2 Wave 1
22. Indicates LOWEST average price of wave

    Quick Price Overview (VI)

    Indicates HIGHEST average price of wave Wave 1 Wave 2 Source: TMS Research, October 2013, Note: The price shown is the average price

23. General Findings across Townships

    Source: TMS Research, October 2013

24. Agenda

    Introduction Sample Key Findings Objectives Detailed Findings Appendix
25. Overall Findings

26. Price Comparison across Townships

    In Wave 2 there was an increase in the average price of white bread in retail stores more specifically Albany and Sasko brands. A fall in the average price in Soweto can be explained by presence of the cheaper brand i.e. Nature’s dream in Wave 2 instead of the Sasko brand that was available in wave 1. Average price of bread in Diepsloot and Sebokeng Foreign Owned stores increased because there were no cheaper substitutes in Wave 2 in these stores. White bread Wave 1 Wave 2 Source: TMS Research, October 2013

27. Price Comparison across Townships

    As with white bread, Wave 2 saw an increase in the average price of brown bread in retail stores more specifically Albany and Saskobrands. A fall in the average price in Soweto can be explained by presence of the cheaper brand i.e. Nature’s dream in Wave 2 instead of the Sasko brand that was available in wave 1.Average price of bread in Diepslootand Sebokeng Foreign Owned stores increased because there were no cheaper substitutes in Wave 2 in these stores. Brown bread Wave 1 Wave 2 Source: TMS Research, October 2013

28. Price Comparison across Townships

    In wave 1 there was a promotions for milk in the Retailer’s house brands across townships, this is also seen by an increase in the average price of milk in retailers across townships in the second wave. Milk(1l) Wave 1 Wave 2 Source: TMS Research, October 2013, Note: Missing values are due to stock availability during the store visits.

29. Price Comparison across Townships

    There is a significant increase in the overall average price of mealie meal in Soweto this is due an increase in price of mealie meal in one of the Retailers. The average price of mealie meal in foreign owned stores also decreased in the second wave. Maize meal (1kg) Wave 1 Wave 2 Source: TMS Research, October 2013, Note: Missing values are due to stock availability during the store visits.

30. Price Comparison across Townships

    Margarine is most expensive in the Diepsloot Foreigner Owned stores as well in "Spaza" shops this is because these stores only sell Rama. As evident from the graph there has been a decrease in the margarine price in Sebokeng in both Foreign Owned stores and "Spaza" shops - this is explained by the presence of cheaper margarine brands i.e. Rondo and Sunshine D in the second wave. Margarine (500g) Wave 1 Wave 2 Source: TMS Research, October 2013, Note: Missing values are due to stock availability during the store visits.

31. Price Comparison across Townships

    There has been an increase in the average price of tinned baked beans across all Retailers, this is due to most Retail stores offering specials on baked beans in the first wave. Tinned baked beans Wave 1 Wave 2 Source: TMS Research, October 2013, Note: Missing values are due to stock availability during the store visits.

32. Price Comparison across Townships

    There was a fall in the average price of tinned pilchards in the second wave - this is due to promotions in several retail stores. With regard to Foreign Owned stores and “Spaza” shops there were not significance differences in prices between waves. A fall in the average price of pilchards in Sebokeng is explained by an added brand i.e. Glenryck in one of the “Spaza” shops. Tinned Pilchards Wave 1 Wave 2 Source: TMS Research, October 2013

33. Price Comparison across Townships

    There was a fall in the average price of biscuits in “Spaza” shops across all townships in wave 2. This maybe due to a decrease in the price for Baker’s Marie biscuits. Marie Biscuits Wave 1 Wave 2 Source: TMS Research, October 2013

34. Price Comparison across Townships

    A fall in the price of lemon creams in Sebokeng‘s “Spaza” shops and Foreign Owned shops in Soweto was due to availability of cheaper brands in the wave 2. Similarly an increase in the average price in Diepsloot stores is due to the addition of an expensive brand in wave 2. Furthermore, a fall in the average price in Soweto Retailers is also owed to the availability of the cheaper Retailer‘s house brand which was out of stock in the first wave. Lemon Creams Wave 1 Wave 2 Source: TMS Research, October 2013

35. Price Comparison across Townships

    As evident from the graph there is a significance variance in prices in the Diepsloot area across different store types in both waves. This is because “Spaza” shops in Diepsloot only sell the “Bakers” brand of tennis biscuits while Foreign Owned stores have 1 or 2 brands, and Retailers have an even greater brand variety. Tennis biscuits Only cheap brands in stock in wave 2 Increase or decrease in average attributed to less or more variety in the stores in these areas ,respectively Wave 1 Wave 2 Source: TMS Research, October 2013

36. Price Comparison across Townships

    A fall in the average price of rice in Sebokeng is due to increased variety available in wave 2. The increase in the average price of rice in Diepsloot “Spaza” shops is due to the lack of cheaper brands in stock. Rice (1kg) Wave 1 Wave 2 Source: TMS Research, October 2013

37. Price Comparison across Townships

    There is a fairly small gap between waves in Foreign Owned stores and “Spaza” shops. The decrease in the average price of eggs in retailers is due to promotions in most Retail stores. Eggs (6x) Wave 1 Wave 2 Source: TMS Research, October 2013, Note: Missing values are due to stock availability during the store visits.

38. Price Comparison across Townships

    Price of sunflower oil is fairly similar across retailers in different areas. Diepsloot however has the most expensive sunflower oil price in its Retailer store. Sunflower Oil (750ml) Wave 1 Wave 2 Source: TMS Research, October 2013

39. Price Comparison across Townships

    Foreigner Owned stores in Sebokeng sell toilet paper for the cheapest price. There are no significant price differences between waves. Toilet Paper Most stores had “Twinsavers” only in stock Had “baby soft” in one of the “Spaza” shops Wave 1 Wave 2 Source: TMS Research, October 2013

40. Price Comparison across Townships

    In Soweto there was a decrease in the average price of washing powder across all store types. Average prices between waves is fairly similar in the Sebokeng area across different store types. Washing Detergent (500g) Wave 1 Wave 2 Source: TMS Research, October 2013

41. Price Comparison across Townships

    They are no major differences between waves. Nappies are cheaper in Retail stores and more expensive in “Spaza” shops Disposable Nappies (1x) Wave 1 Wave 2 Source: TMS Research, October 2013

42. Brand Variety vs. Price

    Foreign Owned stores show an inverse relationship between brand variety and price.”Spaza” shops show that brands may remain constant but there can still be a price decrease. Milk Wave 1 Wave 2 Source: TMS Research, October 2013

43. Brand Variety vs. Price

    Foreign Owned stores show a direct relationship between brand variety and price thus higher brand variety results on higher price. Average price in “Spaza” shops fell even though there was no change in brand variety. Maize Meal Wave 1 Wave 2 Source: TMS Research, October 2013

44. Brand Variety vs. Price

    “Spaza” shops show an inverse relationship between price and brand variety thus fewer available brands in stores leads to high prices. Both Foreign Owned stores and retail stores show that prices may increase while brand variety remains stagnant. Margarine Wave 1 Wave 2 Source: TMS Research, October 2013

45. Brand Variety vs. Price

    “Spaza” shops show a lower price in relation to a higher brand variety. There is a significant price increase in Retailers for a constant brand variety(due to promotions in the first wave) Tinned Baked Beans Wave 1 Wave 2 Source: TMS Research, October 2013

46. Brand Variety vs. Price

    Foreign Owned stores show a higher price in relation to higher variety. Tinned Pilchards Wave 1 Wave 2 Source: TMS Research, October 2013

47. Brand Variety vs. Price

    Foreign Owned store show evidence of a lower price related to high variety.”Spaza” shops show a significant fall in prices for a constant brand variety. Tennis Biscuits Wave 1 Wave 2 Source: TMS Research, October 2013

48. Brand Variety vs. Price

    There is clear evidence of a solid relationship between brand variety and price. In both Foreign Owned stores and “Spaza” shops lower brand variety lead to high prices and vice versa. Sunflower Oil Wave 1 Wave 2 Source: TMS Research, October 2013

49. Brand Variety vs. Price

    For both Foreign Owned stores and “Spaza” shops greater variety in brands leads to lower prices. Toilet Paper Wave 1 Wave 2 Source: TMS Research, October 2013

50. Brand Variety vs. Price

    As evident from the graph an increase in brand variety leads to a fall in prices. Washing Detergent (500g) Wave 1 Wave 2 Source: TMS Research, October 2013

51. Next Steps

    Develop strategy for gaining long-term buy-in from store owners in order to ensure accurate track- ability of the study. Possibly incentivise shop owners to participate by offering them a cash reward NAFCOC to clearly explain what they plan to do with the results and how this will benefit the stores Give assurance to the foreigner owned stores that their information will not be reported to the authorities. As significant differences in prices and brand availability was witnessed between waves, we would recommend that the project continue with 2 waves being conducted every quarter, however this is ultimately the decision of NAFCOC. It appears that stores are stocked on a monthly basis and the more popular brands (which are in most cases also the more expensive brands) are sold first, leaving the consumers with the option of the cheaper and less popular brands at the middle of the month.
52. Thank you
53. Appendix

54. Price Range across Brands: “Spaza”shops and Foreign Owned stores

    White Bread Wave 1 Source: TMS Research, October 2013 Wave 2

55. Price Range across Brands: Retailers

    White Bread Wave 1 Wave 2 Source: TMS Research, October 2013

56. Price Range across Brands: “Spaza”shops and Foreign Owned stores

    Brown Bread Wave 1 Source: TMS Research, October 2013 Wave 2

57. Price Range across Brands: Retailers

    Brown Bread Wave 1 Wave 2 Source: TMS Research, October 2013

58. Price Range across Brands: “Spaza”shops and Foreign Owned stores (I)

    Milk Wave 1 Source: TMS Research, October 2013

59. Price Range across Brands: “Spaza”shops and Foreign Owned stores (II)

    Milk Wave 2 Source: TMS Research, October 2013

60. Price Range across Brands: Retailers

    Milk Wave 1 Wave 2 Source: TMS Research, October 2013

61. Price Range across Brands: “Spaza”shops and Foreign Owned stores (I)

    Mealie Meal Wave 1 Source: TMS Research, October 2013

62. Price Range across Brands: “Spaza”shops and Foreign Owned stores (II)

    Mealie Meal Wave 2 Source: TMS Research, October 2013

63. Price Range across Brands: Retailers

    MealieMeal Wave 1 Wave 2 Source: TMS Research, October 2013

64. Price Range across Brands: “Spaza”shops and Foreign Owned stores

    Margarine Wave 1 Wave 2 Source: TMS Research, October 2013

65. Price Range across Brands: Retailers

    Margarine Wave 1 Wave 2 Source: TMS Research, October 2013

66. Price Range across Brands: “Spaza”shops and Foreign Owned stores

    Baked Beans Wave 1 Wave 2 Source: TMS Research, October 2013

67. Price Range across Brands: Retailers

    Baked Beans Wave 1 Wave 2 Source: TMS Research, October 2013

68. Price Range across Brands: “Spaza”shops and Foreign Owned stores

    Tinned Pilchards Wave 1 Wave 2 Source: TMS Research, October 2013

69. Price Range across Brands: Retailers

    Tinned Pilchards Wave 1 Wave 2 Source: TMS Research, October 2013

70. Price Range across Brands: “Spaza”shops and Foreign Owned stores

    Marie Biscuits Wave 1 Source: TMS Research, October 2013 Wave 2

71. Price Range across Brands: Retailers

    Marie Biscuits Wave 1 Wave 2 Source: TMS Research, October 2013

72. Price Range across Brands: “Spaza”shops and Foreign Owned stores

    Lemon Creams Wave 1 Source: TMS Research, October 2013 Wave 2

73. Price Range across Brands: Retailers

    Lemon Creams Wave 1 Wave 2 Source: TMS Research, October 2013

74. Price Range across Brands: “Spaza”shops and Foreign Owned stores

    Tennis Biscuits Wave 1 Source: TMS Research, October 2013 Wave 2

75. Price Range across Brands: Retailers

    Tennis Biscuits Wave 1 Wave 2 Source: TMS Research, October 2013

76. Price Range across Brands: “Spaza”shops and Foreign Owned stores

    Rice Wave 1 Wave 2 Source: TMS Research, October 2013

77. Price Range across Brands: Retailers

    Rice Wave 1 Wave 2 Source: TMS Research, October 2013

78. Price Range across Brands: “Spaza”shops and Foreign Owned stores (I)

    Eggs Wave 1 Source: TMS Research, October 2013

79. Price Range across Brands: “Spaza”shops and Foreign Owned stores (II)

    Eggs Wave 2 Source: TMS Research, October 2013

80. Price Range across Brands: Retailer

    Eggs Wave 1 Wave 2 Source: TMS Research, October 2013

81. Price Range across Brands: “Spaza”shops and Foreign Owned stores (I)

    Sunflower Oil Wave 1 Source: TMS Research, October 2013

82. Price Range across Brands: “Spaza”shops and Foreign Owned stores (II)

    Sunflower Oil Wave 2 Source: TMS Research, October 2013

83. Price Range across Brands: Retailer

    Sunflower Oil Wave 1 Wave 2 Source: TMS Research, October 2013

84. Price Range across Brands: “Spaza”shops and Foreign Owned stores

    Toilet Paper Source: TMS Research, October 2013 Wave 1 Wave 2

85. Price Range across Brands: Retailers

    Toilet Paper Wave 1 Wave 2 Source: TMS Research, October 2013

86. Price Range across Brands: “Spaza”shops and Foreign Owned stores (I)

    Washing Detergent Wave 1 Source: TMS Research, October 2013

87. Price Range across Brands: “Spaza”shops and Foreign Owned stores (II)

    Washing Detergent Wave 2 Source: TMS Research, October 2013

88. Price Range across Brands: Retailer

    Washing Detergent Wave 1 Wave 2 Source: TMS Research, October 2013

89. Price Range across Brands: “Spaza”shops and Foreign Owned stores

    Disposable Nappies Wave 1 Wave 2 Source: TMS Research, October 2013

90. Price Range across Brands: Retailers

    Disposable Nappies Wave 1 Wave 2 Source: TMS Research, October 2013

91. Brand Variety vs. Price

    No clear relationship between price and brand variety White Bread Wave 1 Wave 2 Source: TMS Research, October 2013

92. Brand Variety vs. Price

    No clear relationship between price and brand variety Brown Bread Wave 1 Wave 2 Source: TMS Research, October 2013

93. Brand Variety vs. Price

    No clear relationship between price and brand variety Marie Biscuits Wave 1 Wave 2 Source: TMS Research, October 2013

94. Brand Variety vs. Price

    No clear relationship between price and brand variety Lemon Creams Wave 1 Wave 2 Source: TMS Research, October 2013

95. Brand Variety vs. Price

    No clear relationship between price and brand variety Rice (1kg) Wave 1 Wave 2 Source: TMS Research, October 2013

96. Brand Variety vs. Price

    No clear relationship between price and brand variety Eggs (6x) Wave 1 Wave 2 Source: TMS Research, October 2013

97. Brand Variety vs. Price

    No clear relationship between price and brand variety Disposable Nappies Wave 1 Wave 2 Source: TMS Research, October 2013