Standing in line at the cashier in the supermarket, Jody checks then rechecks her grocery cart then dumps the box of cereal in the basket left by a previous shopper, fearing she will not be able to pay for all her groceries.
With the steady increase in her grocery bill for the past few months, she is adamant she will stick to her $8,000 monthly budget.
"I was surprised because even though my father bought me some groceries, which relieved me of having to buy items such as rice, flour, sugar, and some other bulk items, my bill still came to the same $8,000," said the young professional, whose last name is withheld on request.
"I'm really dreading next month," she told Sunday Business.
The cost of groceries has become a moving target for many as the Jamaican dollar steadily loses value and food prices climb in tandem.
By STATIN's estimate, inflation is tracking at an annual rate of 8.6 per cent. Food distributors say that year to date, grocery items are up by 3-10 per cent.
For local retailers and distributors, the increase in food prices has been inextricably linked to the depreciating dollar.
Consumer behaviour a factor
And due to the dynamics at play in the market, consumer behaviour ends up being a factor in the increased cost of goods. Because customers like Jody try to penny-pinch and stay within budget, that has led to falling demand and, therefore, increasing prices, say food traders polled by Sunday Business.
The primary issue, however, is the currency - and the price of imports.
"The main reason for the price increase is the depreciation of the dollar," said Tina McLymont, brand manager at NM Marketing & Distribution.
According to McLymont, since many food items are imported, "over the last year and a half or so," the depreciation of the Jamaican currency has meant unsteady prices for shoppers.
"What is happening is that each time we get a shipment, the cost goes up and we can't absorb all the cost. We have to pass it on consumers because we are in the business to make money," said McLymont.
"So as the dollar continues to devalue, we have to continue to increase our costing rate based on the exchange rate in the market, and this will impact the prices," she said.
At the top of 2014, the JMD was trading at $106.38 to the US dollar. On Friday, it traded at $109.50, a decline of three per cent year to date. The Jamaican dollar is now worth less than one US cent.
Basic food items holding steady
Checks by Sunday Business showed the cost of some basic food items holding steady under the pressure, with others registering up to 10 per cent increase in price.
A 10-pound pack of counter flour currently sells for roughly $400 with "no movement in price for quite a while," said Sampars store manager Marvette Dixon.
Cooking oil has, however, seen a seven per cent increase, moving from $295 for a one-litre bottle to $315.
The price of sugar has also remained stable for quite a while, currently selling for $495 per 10-pound pack, the same it has been since last year, Dixon said.
The Sampars representative noted that the cost of rice - which is imported - continues to fluctuate, selling now for $438 per 10-pound pack.
"You might get a shipment that you have to sell cheaper or more expensive than the previous one because of the movements in price," Dixon said.
One of the more competitively priced toilet paper brands, Sophie, has seen a five per cent increase and is now selling for $55 per roll.
While imported products have seen steady increases in price, "anything that is locally produced is steady in price", said Dixon.
"We have seen price increases ranging from three to 10 per cent for imported products, depending on the company, but for local products, you don't see that movement at all. It is quite stable, but anything that has to do with the US dollar, expect the increase," she said.
Distributors further noted a change in consumer behaviour reflective of Jody's conundrum as well as decreased sales in the quantity and types of products shoppers now buy.
"People will pick up the basic food items. For someone who would buy a Lysol or a particular brand of disinfectant or dish-washing liquid, we find that they will now go for the cheaper brand," said Dixon.
"You will hear them saying to themselves, 'I'm not spending more than the budgeted amount', so they will take up the basic rice, flour, sugar, and meat, and then if money is left, they then go for those higher-priced items. Everybody is now shopping on a budget," she said.
Decreased sales
McLymont, too, says the grocers supplied by NM Marketing and Distribution have reported decreased sales in "many imported products" as consumers restrict their spending.
The Bank of Jamaica has noted an acceleration of the pace at which the Jamaican currency is losing, but the central bank has assured the public that it has sufficient reserves in its arsenal to stabilise the exchange rate.
tameka.gordon@gleanerjm.com
Published: Sunday | March 23, 2014
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