South Africa’s spending patterns during lockdown

Automated clearing house BankServAfrica has published new data on spending habits during South Africa’s lockdown, showing that consumer spending has reflected several about-turns.

The data is based on Point-of-Sale (POS) and transactions from ATM withdrawals from the beginning of March until 5 April 2020.

“This provides economic insights into the consumer impact of coronavirus and is based on what our data is telling us,” said Shergeran Naidoo, head of Stakeholder Engagement sat BankservAfrica.

“Our transaction data showed consumer spending was surprisingly strong before any coronavirus case was ever reported in South Africa at 20% above last year’s rate. At times, spending was speeding up but at others, levelling out as the growth rate slowed down,” he said.

On 5 March 2020, the first coronavirus case was announced (point A). The spending slowdown then became more pronounced as the volume of consumer transactions eased, said Naidoo.

Pre-lockdown

On 15 March 2020, president Cyril Ramaphosa announced a national state of disaster beginning 18 March with school closures, a partial travel ban and discouraged use of non-essential travel.

Gatherings of more than 100 people were prohibited. If we look at point B to point C, it seems this message reached consumers. Spending picked up again, particularly among those who were paid in the middle of the month and were able to head to the shops.

By the following week, spending declined from the levels of last year.

At point D, spending had already fallen back 20% on a year ago. Around this point, the president announced a 21-day national lockdown would commence from 27 March 2020.

“As the biggest salary payment day is the 25th of every month, people raced to the shops to purchase their provisions,” said Naidoo.

“The scenes were similar to Black Friday, only that there were not many specials; people were stocking up in order to prepare for the lockdown.

“On 25 March 2020, consumer transaction volumes were 158% of normal spend this time last year. The bar was set even higher the next day, 26 March 2020, at 172% of normal spend for a month-end payday (point E).”

Post-lockdown

On the days following the nationwide lockdown, consumer spending fell to 28% of normal levels (point F).

But on the social grant payment day on 30 March 2020, consumer behaviour returned to near-normal levels for that time of the month with transactions reaching 98% of typical spend (point G).

After two more days of above 60% of typical spend, it fell back to 45% (point H) as one would expect from the lockdown, said Naidoo.

“This could have also been caused by the restricted movement, food items being limited to essentials only and some South African households coming under financial strain,” he said.

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