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SA shoppers are cutting back on all non-essential spending, says PwC
By our News Team | 2023
Big decreases forecast in fashion, health and beauty. Homeware, sports, home entertainment and virtual online activities also face pressure.
Amid elevated inflation and rising interest rates, a constrained economy and rolling blackouts, the purse strings of millions of South Africans have been tight for some time. PwC’s latest Global Consumer Insights Survey report shows that 72% of local consumers are extremely, or very, concerned about their personal financial situation – the second-highest proportion of consumers globally who feel this way.
Anton Hugo, PwC Africa Retail Industry Leader, says: “As record levels of load shedding, rising inflation and a poor job market continue to plague the local economy, many consumers are holding back on non-essential spending, with some stopping all non-essential spending altogether.”
Photo by David Gomes from Pexels
The report shows that shoppers who identified as ‘most concerned’ are significantly more likely to change their shopping and lifestyle behaviours. These will include:
- A decrease in spend across all retail categories in the next six months.
- Significantly less likely to be planning travel in the first half of 2023.
- Significantly more likely to delay purchases until the items are on promotion.
- Buy in bulk to save over time.
Shopping trends and future expenditure
Almost all (99%) of South African shoppers are planning to adopt behaviours that will help them save money over the next six months. “These consumer behaviour changes are likely to exert additional pressure on retailers who are already grappling with constrained margins,” Hugo observes.
A significantly larger proportion of consumers are also planning to reduce their spending across retail categories, with the greatest decrease forecast in fashion, as well as health and beauty.
“Homeware categories, sports, home entertainment and virtual online activities are also expected to take a knock,” Hugo says. “The only category that is more likely to not see a decrease in spend is groceries, however this is probably driven by consumers’ expectation of the rising cost of living driven by inflation.”
Despite overall reduced spending among consumers, 85% are still willing to pay more than the average price for products that are produced or sourced locally, made from recycled, sustainable or eco-friendly materials (83%), and produced by a company with a reputation for ethical practices.
Shopping channel trends
As technology continues to evolve, SA shoppers are increasingly drawn to digital features that can enhance their in-store shopping. This indicates a desire for a more holistic shopping experience that leverages the best of both worlds.
“Looking ahead, we can expect to see a shift in the shopping habits of South African consumers. Fifty-seven percent say they anticipate an increase in the use of online channels, with 59% expecting retailers to offer efficient delivery or collection services,” says Suleman Jhavary, PwC South Africa Operations Transformation Leader.
“However, when it comes to shopping in physical stores, most expect their behaviour will remain unchanged over the next six months.
“This represents a significant change in outlook compared to previous surveys, where 47% of consumers expressed a desire to reduce their in-store shopping.”
You can download the full survey here.
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