South African consumers will likely pinch their pennies this festive season as they cast a gloomy outlook on the weeks ahead.<\/p>\n\n\n\n
According to economists from the Bureau for Economic Research (BER), consumer confidence has edged slightly lower to -17 index points in Q4, after recovering to -16 in Q3 from a very depressed -25 in Q2.<\/p>\n\n\n\n
“The latest reading marks the lowest festive-season consumer confidence in more than two decades, suggesting that consumers will keep tight control over their purse strings during the holiday shopping season<\/strong>,” it said.<\/p>\n\n\n\n The slight decline in the Consumer Confidence Index (CCI) in Q4 can be ascribed to a relapse in the economic outlook sub-index of the CCI, while the household financial outlook sub-index further improved. <\/p>\n\n\n\n “Interestingly, consumers are more pessimistic about the outlook for the domestic economy relative to their own household\u2019s perceived financial prospects,” the BER said.<\/p>\n\n\n\n While the CCI has shown a slight improvement in the durable goods sub-index, it remains at -25, which means that consumers still feel that it is not the right time to buy big-ticket durable goods, like vehicles, furniture etc.<\/p>\n\n\n\n The dampened enthusiasm from consumers to spend is also visible through other metrics.<\/p>\n\n\n\n Notably, the recent Black Friday shopping weekend – which has become the biggest retail sales day on the calendar – was more modest than in previous years, with shoppers spending less.<\/p>\n\n\n\n While this can be explained by many retailers pushing the sale into more of a month-long retail period, analysts have pointed to the tougher financial challenges faced by households in 2023 as a big barrier.<\/p>\n\n\n\n More recently, this attitude and environment from shoppers has also revealed itself in the BER’s latest Retail Survey, which showed that, despite improved conditions for retailers, like lower levels of load shedding, this is unlikely to counter the economic hardships on consumers.<\/p>\n\n\n\n \u201cHigh inflation and interest rates have reduced the purchasing power of consumers, and retail sales volumes will likely disappoint compared to the same quarter of last year,\u201d the BER said.<\/p>\n\n\n\n \u201cWith cost-of-living pressures projected to remain high in the near term, business conditions will remain challenging in the trade sector during the first half of 2024.”<\/p>\n\n\n\n Some good news<\/strong><\/p>\n\n\n\n While consumers may not be feeling the Christmas urge to splurge, some positive news is expected to come this week, with Stats SA set to publish the inflation figures for November 2023.<\/p>\n\n\n\n Following three months of inflation edging higher, the figure for November is expected to drop again – largely thanks to sizeable fuel price cuts that came through for the month.<\/p>\n\n\n\n “The consumer inflation print for November should slow a moderation relative to October on the back of a decent fuel price decline at the start of the month \u2013 same for producer prices (PPI),” the BER said.<\/p>\n\n\n\n
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