Cash-strapped South Africans are changing their shopping habits to make it through the month
Soaring inflation and a rising cost of living are forcing consumers to adopt new shopping behaviours to save money wherever possible.
The latest Nielsen Global Outlook Report shows that consumers are moving towards discounts (49%), chasing promotions (36%) and buying in bulk (50%), while 56% are keen to take advantage of loyalty schemes.
PwC has echoed these findings, noting that almost 99% of South Africans are now adopting cost-saving measures.
Dov Slowatek, the CEO of the cashback platform SavvySaver said that consumers had reached a crisis point.
South Africans are now trying to stretch their budgets to accommodate skyrocketing costs and are looking for budget-friendly remedies to close the affordability gap.
“Consumers are being buffeted from all sides: from the annual increase of 13.6% in food and non-alcoholic beverage prices in February this year – the highest reading since April 2009, and the impending technical recession, consumers are scrambling to put food on the table,” said Slowatek.
“According to the annual Truth & BrandMapp survey results which highlight ongoing loyalty trends, South Africans want the cashback loyalty benefits the most,” he said.
Sky-high food prices are currently under investigation by the country’s Competition Commission. Price increases for sunflower oil, brown and white bread, as well as maize meal over the last two years, have been flagged as possibly “opportunistic price increases”.
“The food sector remains a priority for the commission as poor consumers spend a significant portion of their income on essential food items. As food inflation remains elevated and load shedding continues to affect business operations, food price monitoring will remain a priority for the commission, given its importance to the welfare of South Africans,” said the Competition Commission.
Businesses themselves have been losing hope in the current situation as demand from consumers has decreased. The retail sector at large is under pressure; the latest Retail Survey from the Bureau for Economic Research (BER) showed that confidence has dropped from 43% to 43% in South Africa.
Consumer confidence is also at the lowest levels since the second quarter of 2022 when the pandemic was running rampant, KwaZulu-Natal was hit with severe flooding, and the war in Ukraine had just started affecting the global economy.
In the first quarter of 2023, consumer confidence decreased to a negative 23 points. This followed a minor improvement from negative 20 points in Q3 of 2022 to negative 8 points in Q4 of the same year.
This all comes as the country braces for an expected 25 basis point interest rate hike this Thursday by the South African Reserve Bank (SARB). The hike is likely to add further pressure to already cash-strapped consumers, taking the repo rate to 7.5% and the prime lending rate to 11%.
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