Overall retail footfall to malls had been on a downward trend for the past two years since January 2020, while online retail search had stabilised since the initial increase witnessed, albeit at a higher level than at the onset of the pandemic, Absa said.
It said looking at mobility data, Absa could see a clear trend starting to emerge two years since the onset of the Covid-19 pandemic as an array of lockdowns and disruptions in various forms had resulted in extremely volatile spending behaviour from consumers.
“The data from our Merchant Spend Analytics up to March 2022 tells a story of a consumer that is holding firm, with increased spending in categories across the board since lockdowns eased. However, we recognise the gap in the data is the cash trading in the system, and that cash is more difficult to track, bearing in mind that South Africa has a large cash economy,” it said.
In Absa’s Cash Collection business, it had identified a similar trend to that witnessed in the mobility data, showing a decline in cash volumes processed, giving rise to a potential warning sign pertaining to the consumer’s financial health.
During April it had seen negative growth in its merchant spending data in some categories, including groceries, raising a further “flag to our concern”.
“The data, although still very limited, could suggest that economic pressure on consumers is mounting. Further pressure in terms of the fuel price hikes and the cost pressure building in the supply chains as a result, certainly paints a bleak picture on consumer health and economic outlook for South Africa,” Absa said.