While inflation subsided a little in the previous month as the consumer price index (CPI) data for May showed it had slowed to 6.3% from 6.8% in April, new data released shows which age groups are spending the most country.
Maholla, a consumer rewards app, released data, which indicated that youth basket sizes have the lowest rand value on average in South Africa today, when compared to those of any other consumer age category in the market.
“Retail data of the overall basket sizes of consumers in the youth age group (18 - 35) reveals an average rand value of just R212.68 per basket, followed by consumers aged 50+, with an average basket size of R218.49. The overall basket size for groups in the 35-49 category remains the highest, at R221.30,” Maholla said in a statement.
While the cost of living remains high for consumers, many are looking for ways to cut costs and stretch their rand a little further every month.
Economists are predicting a further reprieve next month, saying that the South African Reserve Bank should be halting their interest rate hiking cycle, along with a slight drop in petrol prices for July.
Maholla said the data indicated that the youth, and the households that depend on them, had smaller basket sizes than those of most pensioners in the country.
The retail data captured by Maholla also indicated that youth basket sizes had dropped most significantly in Limpopo (15.78%), the Free State (14.35%) and KwaZulu-Natal (13.23%) year on year (May 2022 - May 2023).
Maholla’s data reveals that youth basket sizes at Shoprite and Pick n Pay had seen the most prominent decrease over this period, with Shoprite’s youth basket size decreasing as much as 22.84% year on year.
Clicks had also seen a pronounced downsizing of 10.76%.
The youth turn to wholesalers looking for extra savings
“The data collected by over half a million receipts on the Maholla app indicates that members of our youth are turning to wholesalers and bulk retailers to make ends meet. While traditional retailers have seen a marked contraction in basket sizes, Boxer and Game have seen an uptick, indicating a concerted effort by consumers to insulate themselves against inflation and rising food prices by purchasing their goods at wholesale prices,” shares Adam Reilly, the CEO at Maholla.
This comes as Massmart’s Makro came out as the cheapest store in South Africa to fill up a grocery basket with basic items two months in a row.
According to data from Outlierafrica, which looks at in-store prices of the same basket of goods across eight major retailers, Makro ranked as the cheapest store to buy goods from, with the most expensive being Spar, for the month of April 2023.
Makro came out tops with the cheapest basket in April 2023, totalling R393.60. This is R11.27 less than the second cheapest retailer – Food Lover’s Market.
“We are increasingly seeing that consumers are realigning their shopping habits and adopting cost-cutting behaviours. Understanding our customers and giving them what they need is core to our business. The increasing inflation and cost of living mean that we need to constantly be finding ways of ensuring our customers get the best deals in the market and allow them to get more for less,” said Kevin Maier, the merchandise vice-president: food for Makro.
Meanwhile, data from the April 2023 Household Affordability Index compiled by the Pietermaritzburg Economic Justice and Dignity group revealed the average price of a household food basket was more than R5 000 in April.
Luxury retailers, including Foschini, have also seen a decrease in youth basket sizes at their stores.
“Unsurprisingly, the youth basket sizes at Woolworths have increased by 11.45% year on year. This tells us that there are those in the youth category that enjoy a slightly higher disposable income, and are therefore not as price sensitive to inflation as those flocking to wholesalers to bring their monthly food costs down to a reasonable level,” Reilly added.
One correlation is evident across all retailers – the number of items in the basket are decreasing.
Between May 2022 and May 2023, the number of items in the youth basket decreased by 6%.
The sample size of consumers aged 18-35 included more than 45 100 users of the Maholla app, which captures retail agnostic receipt data for shoppers across all provinces in real time.
Consumers are rewarded for scanning their till slips into the app, with instant airtime, data, wireless internet and other vouchers.
This allows the Maholla team to capture significant amounts of consumer data for every retailer, grocer, pharmacy or homeware store in South Africa.
The average basket size of consumers in the youth category was collated from over 2 000 different retailers, using the information provided by over 512 000 receipts for 2.38 million items sold over the last year.