Middle class South Africans are generally regarded as mass or emerging affluent.<\/p>\n
According to the data, a few categories account for a significant portion of total spend across all client groups \u2013 including groceries, services, and travel.<\/p>\n
While groceries covered the typical food basket of each client group and travel accounts for fuel spend and air tickets, services accounted for a wide range of items, from construction to beauty services, said Discovery Bank.<\/p>\n
However, among these categories, South Africans\u2019 largest spending category is groceries.<\/p>\n
According to the report, grocery spend as a proportion of total spend has increased for both Discovery Bank and South Africa owing to rising food prices that have outstripped general consumer price indices.<\/p>\n
South Africans experienced food inflation of 12% in 2022, almost double the national inflation rate, which eased to 6.9% in January 2023.<\/p>\n
As a result, the report noted increased spending across all client categories compared to 2019, but some are struggling more than others.<\/p>\n In South Africa, the increase in food costs is especially felt by the mass market, spending almost 50% more on groceries than they did in 2019, said Discovery.<\/p>\n This is followed by the affluent mass market (14%), emerging affluent (12%), and the high net worth market, seeing the smallest increase in spend on groceries, of only 4%.<\/p>\n While total spend on groceries and basket size is directly correlated to income, the data shows that affluent markets are still affected by food inflation.<\/p>\n “Affluent client groups feel the pinch of rising food costs but are able to better manage food inflation by substituting for lower-priced items and by taking advantage of promotions or bulk savings.<\/p>\n Mass consumers are at a disadvantage in this regard. There is no substitution option for the group, and this explains why the impact of food inflation is so much more significant for this client segment,” said Discovery.<\/p>\n![\"\"](\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2023\/03\/food-inflation-.png\")
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