Deflation System of a down
According to Massmart, prices are in deflation in both its Massdiscounters division, where they have dropped an average of 4.2% in the past year, and at Masscash, where they’ve declined 0.6%. The Masscash number, reflecting purchases of food rather than general merchandise, is of course of greater concern to our readers in FMCG, who must surely be eyeing StatsSA’s food inflation number of 0.7% (June YOY) with some concern. Whence the decline? Demand might be a culprit, particularly at the lower end, where Masscash trades, and which is first to be hit by declining employment, also a concern this quarter.
Comment: Shaky times, with certain sharp-suited analysts predicting a W-shaped recession, even in SA.