South Africans are expected to spend more than R284bn over the holiday season, according to results from the seventh annual Summer Spending Survey conducted by short-term lender Wonga.
According to data Wonga collected from 13,775 respondents from across South Africa, individuals plan to each spend an average of R6,832 this festive season.
This is a significant increase from last year’s spend of R5,707 and is the highest figure reported since the survey was first conducted in 2018, with the lowest spend of R5,673 recorded during the Covid-19 pandemic in 2020.
“Our survey this year indicates that South Africans are planning to spend significantly more over this festive season than they have in previous years. The significant spike in festive spending can be attributed to a number of factors such as inflation as well as the recent cuts in interest rates,” said James Williams, chief marketing officer at Wonga.
Williams said it was concerning that some people reported that they withdrew from their retirement savings to fund this after the introduction of the two-pot retirement system.
“However, it is also encouraging that 37% are choosing to spend less and save their money over this period,” Williams said.
Wonga said this year’s statistics showed that only 26% of South Africans have planned ahead and saved throughout the year to cover their costs over the festive season.
This is down on the 2023 figure of 36% and considerably lower than the 42% of respondents who put away savings in 2019.
“When comparing data from our previous six surveys, it is concerning to see that this is the first time that we have seen the saving figure drop below the 30% mark,” Williams said.
He said this was similar to the results from the recent Old Mutual Savings and Investment Monitor which reported that only three in every 10 of working South Africans were prioritising putting money away for a vacation.
The Wonga survey also revealed that 22% of respondents intended using money invested in a stokvel to cover their extra festive season expenses. Notably, this figure was a decrease from over 31% who did so in 2023, and is the lowest percentage recorded since the initial survey.
However, there was less reliance on credit this year when compared to 2023. Though 20% of consumers were expecting to turn to credit providers to cover their end of year festivities, this was down from 24% in 2023.
“As seen in previous years, the percentage of monthly earnings vs festive spend declines through each income band, the lowest of which is for those earning R50,000 per month and above.
“It is, however, concerning that that those earning R2,999 and less expect to spend an average of R3,200, which may result in many lower-income earners having to turn to lenders to get through January.”
The big ticket items
Similar to previous years, food and beverages will account for just over a third of festive season spend, with an average spend of R2,756 person. This is significantly higher than R1,907 spent in this category by individuals in 2023, which is indicative of the high inflation rates and subsequent dramatic rise in food and fuel prices this year.
Transport will make up 17% of the average festive budget, with the majority of people travelling by car, or by bus and taxi. What was interesting is that 10% of respondents plan to reach their destinations by plane, growing from the 4% seen in 2023.
Gifting makes up 14% of the expected budget, with money and shopping vouchers as top of the gift list. Holiday accommodation makes up almost 13% of expenses for those choosing to spend their festive break away from home.
Travel trends
Travel is making a comeback, with almost 24% of holiday makers travelling away from home over the festive period this year. This figure is up from 21% in 2023, however, it is still well below the 38% who travelled in 2018.
“Many people have still not chosen to travel, with the primary reason being unable to afford inflated travel costs,” Williams said.
KwaZulu-Natal has re-emerged as the most popular destination for those travelling within South Africa, with over 18% of holiday makers heading to the coast.
The Eastern Cape is a close second at 17%, followed by Gauteng, the Western Cape and Limpopo each attracting 13% of the local tourism market.
International travel has increased from 2% in 2023 to over 3% this year, which may be attributed to the recovery of the rand against the dollar in recent months. This figure is still relatively lower than the 5% who travelled abroad in 2019.
Online shopping is on the decline
After plateauing last year, online shopping is no longer a favourite among South Africans with just under 18% choosing this once popular option. Over 70% of respondents indicated that they would prefer to shop in store this year, with others preferring markets or choosing to make their own gifts.
This trend could be driven by minimum spend requirements on online shopping platforms, pricey shipping or delivery fees, as well as complicated return policies.
“Our key takeout this year is the impact of the high cost of food and essentials on consumers, as well as the numerous hikes in the price of fuel experienced in 2024.
“Before splashing out during the festive season, it is advisable to take into account any increases such as medical aid and insurance that you may incur going into 2025 so that you are well prepared,” Williams said.
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