Rocket and feather: Why prices shoot up but won’t come down

Anele and the Club chat with personal finance guru Zinathi Gquma about prices that don’t seem to come down.

Listen below.

The rocket and feather principle refers to prices shooting up to cope with economic pressures but being slow to come down when the pressure eases.

This can be seen with prices of eggs and cooking oil which have stayed high despite production costs coming down.

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Gquma looked at 28 food basket items, and only three of their prices dropped between August last year and this year.

This can also be seen with taxi fares, which went up with fuel prices but not down.

“The retailers aren’t really lowering prices because they are trying to maintain their higher profit margins.”

- Zinathi Gquma

The Competition Commission says the problem is not bad enough to launch an investigation yet, but they are monitoring it.

Scroll up to the audio player to listen to the conversation.