Another month, another increase in the price of petrol. What does this mean for producers and consumers? Unleaded 93 petrol costs R23.94 a liter at the time of writing, while unleaded 95 petrol costs R24.17. According to Layton Beard, a spokesperson for the Automobile Association (AA), fuel price increases of R1.85 for petrol and R1.60 for diesel are anticipated for July. The general fuel levy of 75 cents should be added to the anticipated fuel price rise in July, resulting in an increase in the price of petrol of about R2.50. If the predictions come true, the price of 95 petrol in the could increase to about R26.70.
But by far the biggest increase will be in the price of petrol, which will hurt both drivers at the pump and the poor through higher food prices brought on by greater transportation expenses. This is followed by other debilitating price rises for staple foods like cooking oil (up more than 50% in the last year), polony (up more than 30% from the previous year), and price increases of more than 20% for items like potatoes, spinach, beef liver, and chicken liver.
Already in this financially difficult economy, consumers have flooded social media with requests for suggestions and ideas on how to best save money and keep costs low. These are trying times and every person, whether a consumer or producer, is feeling the pinch. Putting plans in place of downsizing such as cutting down on takeaways and luxuries are some of the things that consumers need to consider. Some people are taking drastic measures such as selling their cars, cutting down on those monthly hair and nail appointments, and buying milk alternatives such as milk creamer that comes in sachets. The expenses of logistics and transportation rise along with the cost of goods. South Africans are looking for any method to reduce their expenses in order to survive. Due to the impact on supply, there are less food stocks available, which drives up prices. The price of cooking oil in South Africa, which has increased by more than 50% in the last year, is a telling illustration of how rapidly prices have increased recently.
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Effective marketing can nevertheless encourage you to work more efficiently rather than harder. Finding customer trends through marketing will help you determine the most crucial business strategies. In the food business for example, as a business owner you can recognise your menu’s low-cost, high-profit products, keeping a daily inventory of food, reassessing portion sizes if you frequently encounter waste and adding seasonal menu items that will help you keep people interested in what comes next without reducing the menu.
The factors that influence the global average food price are seldom simple. Prices of many commodities fluctuate according to both general and region- and product-specific factors. By raising the cost of producing and delivering food, for instance, the increase in oil prices that began in April 2020 has a negative impact on the prices of all food items on the FAO index. Because of the COVID pandemic, there are fewer people available to raise, harvest, process, and distribute food, which is another common reason why commodities prices are rising.
The lifeblood of your company is cash flow. For a company to remain healthy, money must continue to come in and go out, with the obvious objective being to make more money than you have to spend on expenses. As long as your business is operating, you will incur costs. When circumstances are tough, many small businesses make the error of drastically reducing or even eliminating their marketing budgets, but this is precisely the period when your small business needs marketing the most. The public is edgy. They are constantly trying to alter their purchasing choices. Get your name out there to make it easier for people to find your goods and services and decide to use them rather than others. Keep up your promotion and increase your marketing initiatives.
Nothing will make your business 100% recession-proof but putting strategies in place can help ensure that it survives difficult times and might even benefit from them. Analyzing your current methods and seeking out ways to enhance them is the first step in the process.
