5 things South Africans are cutting down on to save money right now
Nielsen has released the findings of its latest Consumer Confidence Index (CCI).
The results remained largely unchanged compared to the previous quarter, with South Africans seemingly in a state of limbo as they wait for a highly anticipated economic turnaround.
According to Nielsen Africa MD, Bryan Sun, South African consumers have been hit particularly hard in 2018 with increasing unemployment, a 1% VAT increase and a number of petrol price hikes.
“That said, there are some signs of positivity with the recent announcement of South Africa moving out of technical recession with 2.2% GDP growth in the third quarter of 2018, which may explain South Africans’ willingness to adopt a ‘wait and watch’ approach and the resulting lack of movement in the country’s latest CCI figures,” said Sun.
“Despite the pressures, the current index is still seven points higher than confidence levels a year ago.”
Change in spending
Against this backdrop, Nielsen found that a hefty 85% of South Africans say they have changed their spending on household expenses in Q3 2018 – up one point from the previous quarter.
The top action they have taken to save on household expenses is to cut down on takeaway meals (66%), followed by new clothes (61%), while half of respondents have switched to cheaper grocery brands.
Almost half (47%) are spending less on gas and electricity, followed by 45% who are cutting down on out of home entertainment.
In terms of where South Africans would put money according to their budget allocation:
- 18% said they would spend the highest amount on food and beverages at home;
- 17% on housing (rent, mortgage, utilities);
- 10% prioritise education;
- 9% on routine transportation (car commuting, petrol, and non-holiday trips);
- 7% on communication services (Mobile phone, landline Internet and cable TV).
Sun said that the data shows that the willingness to spend freely among South Africans has declined.
“Moreover, consumers want products that make their life easier,” he said.
“In this environment, manufacturers and retailers need to deliver innovative products that meet the fine balance of convenience and optimal price points, which would be relevant to an increasingly cautious consumer.”
Loading ...