South Africans are down in the dumps

New data shows that almost half of South Africans feel they are in a worse financial position than they were at the same time in 2023, with the cost of food being their biggest concern going forward.

This was highlighted in NIQ’s Consumer Outlook Report 2024, which explores critical trends and insights that shape the consumer landscape in South Africa and 22 other countries.

The report shows that South African consumers across the board are tightening their belts, with nearly all (99%) having changed their shopping habits in light of the cost of living hikes in South Africa.

According to NIQ, 44% of South African consumers feel they are in a worse financial position this year compared to a year ago.

Of these respondents, 82% say that increased costs of living are to blame for their recent financial struggles, up from 76% a year ago.

Nearly two-thirds (62%) state they are worse off due to the economic slowdown, up from 57% a year ago.

As a result, downgrading from premium to mainstream or value products is one of the most widely adopted strategies to make ends meet. Nearly half (48%) have switched to lower-priced options.

Additionally, Nearly half (48%) stock up or buy in bulk when their preferred products are on sale or promotion; 31% are buying larger package sizes.

Some 46% are shopping more often at discount or value stores, 31% are shopping online to get better deals and save transport money, and 59% shop at stores where they can use loyalty points to manage spend.

The report noted that South African consumers have lived through several years of load shedding, rising costs and slow economic growth, and this is starting to filter through to everyday South Africans.

As a result of the financial crunch, the report further noted that South Africans flagged increasing food prices as their biggest concern over the next six months.

More than half (55%) say they have only enough money to cover food, shelter and the basics.

This concern for food prices in South Africa is warranted when considering the move of price tags of food items over the past five years.

South Africans increasingly have to dig deeper and deeper into their pockets to afford the same essential household items at the store.

According to the February 2024 Household Affordability Index by the Pietermaritzburg Economic Justice and Dignity group (PMBEJD), the average cost of the household food basket is R5,277.30.

This is an annual increase of R348,96 (7,1%) from the R4,928.34 total that was recorded in February 2023.

What’s worse is that data from the group shows that since August 2018, there has been a 73.68% increase in the average cost of the household food basket (R3,009.65 to R5,277.30).

This is well above inflation, according to inflation.eu – a worldwide inflation data platform – South Africa’s Consumer Price Inflation (CPI) has been around 34% since 2017.

“2024 is likely to be another difficult year for families,” said PMBEJD.

Read: Grocery basket showdown March 2024: Woolies vs Checkers vs Pick n Pay and more