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Londani Nemaguvhuni\u2019s Sunday trip to the Mall of Africa north of Johannesburg is a finely balanced operation. The 29-year-old has to provide for his young son, but also needs to cut costs.<\/p>\n
Like most South Africans, the construction foreman is feeling the effects of rising taxes, fuel costs and other bills alongside sluggish economic growth that\u2019s put a dent in consumer confidence. A flurry of electricity blackouts could lead to a fifth year of less than 1.5 percent growth, while the joblessness rate stands at 27 percent.<\/p>\n
\u201cIn any economy that is suppressed, people have to make choices,\u201d said Richard Brasher, chief executive offer of nationwide supermarket chain Pick n Pay Stores Ltd. \u201cFor the less affluent in society, their choices are a bit starker in terms of clothing, footwear, rent and electricity,\u201d he said in an interview last week.<\/p>\n
The impact on personal budgets and spending plans is brought into focus as South Africans gear up for a national election on May 8. The ruling African National Congress is on course to retain a majority held since the first all-race vote 25 years ago, according to opinion polls, a result that would extend the 15 month presidency of Cyril Ramaphosa.<\/p>\n
Consumer confidence soared after he replaced Jacob Zuma, whose nine-year tenure was marred by a string of corruption scandals and the near collapse of state-owned companies such as utility Eskom Holdings SOC Ltd. But the surge of optimism popularly known as Ramaphoria has died down, and confidence is the lowest since late-2017, according to a closely followed index.<\/p>\n
Pick n Pay has offered steeper discounts on several food items as the Cape Town-based company grapples with selling price deflation. Shoprite Holdings Ltd, Africa\u2019s biggest grocer with the bulk of its 2,738 stores in South Africa, in February forecast a drop in full-year earnings. Reporting on December holiday sales, Shoprite said back-to-school essentials outperformed discretionary purchases such as toys for the first time.<\/p>\n
The pinch has even been felt by Woolworths Holdings Ltd, a seller of organic food and designer clothing that targets higher-income customers. Its South African fashion, beauty and home sales slid 2.4 percent in its first-half through late December, while food held up. The FTSE\/JSE Africa General Retailers Index has dropped 5.9 percent this year, compared with the benchmark all-share index\u2019s 11% gain.<\/p>\n
Even so, a clear majority for the ANC next week could boost shares in local companies including retailers and banks as it may enable Ramaphosa to enact bolder, investor-friendly policies, according to UBS Group AG.<\/p>\n
\u201cAnything that gives us stability of exchange rates, stability of government and consistency of message will result in people feeling better,\u201d Brasher said.<\/p>\n
For Nemaguvhuni, who works about two and a half hours outside of Johannesburg, it\u2019s unclear how long it will be before he can juggle the budget to pay near-record fuel prices and afford more regular trips home.<\/p>\n