South Africans spent about R116 billion on credit cards in December with data showing that the average credit card transaction size kept pace with inflation as consumers were more cautious about spending.
An estimated R40bn was spent on retail transactions, while about R20bn was used on travelling, eating out and entertainment spending, BankservAfrica’s shopping data for December revealed yesterday.
The average of all card transactions was only 5.6 percent higher than in December 2011. Since September, the year-on-year increase in the average card transaction amount has declined from 7.2 percent.
The data also show that South Africans preferred to stay at home during the December holiday and spent their money on food, furniture and clothes for the family rather than on luxury holidays.
“It seems consumers in general were very careful, since December showed one of the slowest increases in card transactions in the last few years,” Brad Gillis, the chief executive for regulated products at BankservAfrica, said yesterday.
Mike Schüssler, the chief economist at economists.co.za, said: “Consumers are certainly a bit more under pressure than before, as this is the lowest increase in average card values for a December holiday period since 2009.”
The data also showed that about 18 million card transactions took place in general grocery stores and supermarkets. This was followed by 10.6 million credit card transactions at petrol stations and their convenience stores.
Fast food restaurants had only 1.9 million transactions – about a million less than sit-down restaurants and department stores. Schüssler said this might reflect the fact that many transactions at fast food restaurants were cash-based.
The highest average transaction values were in the travel sector, including flights, and at furniture stores.
Meanwhile, consumers have shown mixed reactions toward their financial position in 2013, with the lowest earners being the most pessimistic about the future, according to Credit Suisse’s third annual Emerging Markets Consumer Survey, released this week.
South Africa is the latest addition to this annual survey that includes Brazil, China, Russia, India and Indonesia, among others. The survey polls more than 14 000 consumers across eight emerging economies to help establish a profile on spending habits, future intentions and the factors that influence them.
Consumer hopes in South Africa fall toward the lower end of the survey spectrum. “There is a pronounced degree of disparity in the outlook from the low-income groups compared to the mid- and upper-income earners,” the study said.
It added that despite broad pay rises for many, it did not appear to have assuaged negative perceptions of the financial outlook of low-income earners. With labour unrest spreading to several sectors of the economy, and a high degree of unemployment, the scepticism was perhaps unsurprising, the study found.
Consumers in high income groups remained optimistic about their financial future and expected 5 percent income growth this year.
“However, with 2013 inflation expectations running over 5 percent, most consumers are set to see real income remaining flat or falling.”
Although activity was more muted in most categories, such as holidays and fashion, spending on bigger items such as property and cars was on the rise. The survey suggested that the higher-than-average discretionary spending on vehicles was reflected in industry statistics showing 10 percent domestic volume growth this year.
Smartphone ownership was the greatest among the richest households, and ownership was on average 20 percent higher than for computers.
Spending patterns reveal that South Africans spend less on staples than their emerging market counterparts. Relative to cars and cellphones, respondents spent less on basics such as food, education and savings.
One characteristic that seemed unique in the region was that, of those surveyed, 25 percent used the stock market as a saving channel, the highest among the markets.
Saving channels also included bank accounts, with 88 percent of those surveyed choosing this over other saving channels. Life insurance was also a popular choice.
“Financial investment uptake in the region looks extensive and established,” the Credit Suisse study noted.