In the face of rising living costs, South African households earning in excess of R10,000 per month are considering cancelling DStv, spending less on alcohol and mobile data packages, downgrading their medical aid and cleaning their own homes.
The latest BrandMapp survey — which tracks the behaviours and sentiments of South Africans living in households with disposable incomes from R10,000 a month to the millionaire class, has delved into how the consumer class — defined as those adults who can freely buy goods and services above their basic survival needs — are financially managing their households.
BrandMapp uses a sample of more than 35,000 respondents to profile the 13-million adults who live in mid to top-income households earning in excess of R10,000 per month.
When it comes to strategies to deal with the rising cost of living, the survey shows that there’s not much difference between mid-income and top-end earners, the exception being that middle-income earners are 50% more likely to be considering getting a second job.
About a fifth of the consumer class are thinking of cancelling DStv, spending less on alcohol and their mobile data packages, while less than 10% are thinking about cancelling some insurance and downgrading their medical aid.
“What’s interesting is to see that some of the habits we learnt during the pandemic are hanging around like Long Covid.
“Of the consumer class, 35% are considering cutting back on clothing budgets and 31% say they are likely to go out less to movies and restaurants. All in all, with home grocery delivery, meals-on-wheels and streaming services, a mid-to top-income South African home is a comfortable place to be, and we have learnt that staying home more in our track pants is a relevant cost-saving strategy,” said BrandMapp’s Brandon de Kock.
So does the province you live in shape your cost-saving strategies?
According to the survey if you live in Gauteng, you’re more likely to deal with rising costs by working more, with 28% of the consumer class in the province saying they are open to taking on a second job.
By comparison, a side-hustle is only attractive to 23% of KwaZulu-Natal respondents and 21% of those in the Western Cape.
Gauteng consumers are also more likely to cancel Dstv and cut back on alcohol.
But their enthusiasm wanes when it comes to going out less to movies and restaurants (31%) or staying home for the holidays (16%).
By contrast, these are top strategies for Western Cape consumers, with 36% content to go out less and 19% considering staying home for the holidays.
The top three cost-saving strategies for KwaZulu-Natal are 28% considering going out less to movies and restaurants, 23% getting a second job and 19% cancelling DStv.
The survey also showed that South Africa’s well-heeled boomers are the least likely to be thinking about any cost-saving measures, and at the other end of the scale, Gen Z and millennials are the most open to a wide range of ways to cut their expenses.
“What we see is that going out less to movies and restaurants, staying home more and cutting back on clothing budgets are major strategies across all generations, which mirrors our Covid cost-cutting habits.”
Millennials are the most likely to cut back on alcohol (24%), get a second job (30%) and spend less on clothing (38%), while Gen Xers are mostly likely to withdraw from their pensions (11%) and cancel DStv (24%).
Among Gen Z, 36% are hoping that going out less to movies and restaurants will help get them through the month, and 29% are considering staying home more. Twenty-eight percent are thinking about changing where they shop to find the best prices.
The survey also showed there’s a difference in the way women and men are approaching the cost-of-living crisis.
Women are 50% more likely than men to consider cutting their clothing budgets and changing where they shop for groceries.
In a switch around, men are 50% more likely than women to be thinking of cutting back on alcohol and withdrawing funds from their home loans.
Women are also more likely to be looking for a second job than men, and more willing to clean their own house.
When it comes to general shopping habits, 58% of South Africa’s consumer class say that they always look out for sales and discounts.
34% say the lowest price is the top factor when choosing where they shop — more important than convenience, quality and value.
The youngest consumers are most hooked on the lowest price with 39% choosing a store on this basis.
In keeping with consumer trends the latest PwC South Africa’s Voice of Consumer survey — in which more than 1,000 South Africans participated — found 77% expected to spend more money on groceries.
Most ranked inflation as the number one risk that could affect South Africa followed by macroeconomic activity and social inequality.
“While consumers largely accepted the price increases of the Covid-19 era, they are showing little tolerance for continued rises, especially as they turn their attention to mounting non-discretionary spending.
“This has resulted in consumers searching for better value for their money, with 44% saying they would consider switching from their preferred brands to more affordable options, while only 7% said they would buy a luxury item with their leftover income after paying for bills and essentials,” said Anton Hugo of PwC Africa.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.