SA’s living costs race ahead of inflation

The Competition Commission has released its second Cost of Living Report, revealing a grim landscape for South African consumers in which the cost of survival has outpaced general inflation.

Spanning 2020 to January 2026, the report exposes “price stickiness” in essential value chains, specifically identifying a trend in which retail prices soar quickly in response to cost increases but are sluggish to decline when those costs fall – a phenomenon known as “rocket and feather” pricing.

The utility crisis

The most severe burden on the “vulnerable consumer” comes from regulated utilities. Between 2020 and January 2026, electricity prices rose by approximately 85% and water prices by 68%. These increases are nearly triple the overall inflation rate of 30% recorded during the same period.

Listen: Cost of living report reveals sustained pressure on households

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The Commission attributes these staggering hikes to deep-seated structural failures, including:

 Ageing infrastructure and operational inefficiencies.
 High debt burdens within the utility sector.
 Municipal pricing approaches that effectively add “costs on top of costs”.
 Current pricing systems may fail to provide quick relief despite legislative reforms like the Electricity Regulation Amendment Act.

Food security under threat

The report highlights a troubling “mixed” outlook for food staples. While margins for brown bread and canned pilchards moved in line with costs, other critical items showed a widening “spread”, the percentage difference between producer and retail prices.

Maize meal: While the farm value of white maize dropped from R22.16 in May 2025 to R14.49 per 2.5kg by December 2025, retail prices remained high, with a producer-to-retail spread of 37% in November 2025.
 IQF Chicken: Between June and December 2025, producer prices remained stable at roughly R45, yet retail prices for a 1.5kg pack climbed from R96.38 to R101.56.
Eggs: Producer prices fell in mid-2025, but the commission noted that retail prices lagged, suggesting consumers were denied immediate relief.
Sunflower oil: The commission flagged a specific concern about price stickiness for the cooking staple.

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The looming transport and education squeeze

While petrol prices remained stable throughout 2025 and into January 2026, the Commission warned that renewed instability in the Middle East has already begun pushing oil prices higher. This is expected to exert upward pressure on fuel, transport, and, eventually, food costs starting in April 2026.

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Furthermore, the “missing middle” and low-income families are facing increased pressure due to rising education costs. From 2020 to early 2026, primary education costs rose by 37% and secondary education by 42%, both significantly exceeding headline inflation due to operational costs not covered by government funding.

Competition Commissioner Doris Tshepe emphasised that without greater scrutiny of how administered prices are set and a focus on transparency in tariff determinations, these cost pressures will remain “entrenched,” stifling economic recovery and household welfare.

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