Feeling the pinch: SA’s spending habits adapt to tough economic times

10 August 2018 - 11:36 By Naledi Shange
Image: 123RF / Wavebreakmediamicro

South Africans are cutting back on household cleaning items and making fewer grocery shopping trips in a bid to offset rising costs.

The shift in consumer purchasing behaviour is explained in the latest Shoppergraphics Syndicated Report conducted by Nielsen‚ a global measurement and data analytics company.

The study is conducted on a quarterly basis using information from 4‚000 representative households across the country.

“Looking at the specific categories that have experienced the biggest declines‚ household/cleaning goods‚ which are no longer seen as a necessity‚ have dropped by 6% and beverages by 6%‚ with carbonated soft drinks experiencing particularly negative performance‚” states the report.

The drop in cooldrink prices could be partially attributed to downsizing‚ such as 500ml bottles recently becoming 450ml bottles‚ and an influx of competing brands.

But what are consumers spending most of their money on? "The highest amount of spend is happening in frozen chicken and ready-to-eat cereals‚ sugar‚ UHT [long-life] milk and canned meat‚" the report reveals.

"The latter might be because of the listeriosis crisis earlier this year‚ which compelled many consumers to switch from cold meats."

Consumers are also still buying their dry groceries‚ perishables and staples.

According to Nielsen’s Kelly Arnold‚ “It’s no secret that South African consumers are experiencing a severe wallet squeeze thanks to a raft of rising costs‚ including spiralling petrol and electricity prices‚ the implementation of sugar tax and a VAT increase to 15%.

“The effect that this has had on consumer behaviour is profound and we’re now clearly seeing shoppers jumping out of some categories and consolidating their spend.”

Another trend identified in the report was that consumers were making fewer trips to go shopping. “Top-up” shops that used to be twice or three times a week have become less frequent.

Are retailers are suffering because of this? "We’re simply not seeing massive growth‚ with consumers shopping less and spending slightly less - although there are instances of upgrading to larger pack sizes‚ which may be a contributory factor to the small levels of growth‚” the report states.

“Interestingly‚ the repertoire or number of stores that consumers visit has increased to 4.9 retailers a year. This is as extremely price-conscious consumers seek out deals and are more prepared to shop around."

Nielsen advised that for grocery stores to survive these economically tough times‚ they needed to ensure they had the right composition of goods for shoppers and ensure their prices were right.

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