310114 Edge superstore in Maponya mall South western Township (SOWETO) of Johannesburg.photo by Simphiwe Mbokazi 453

Johannesburg - South Africans were conservative in their spending during December as they choked under pressure from high costs of electricity, transport, school fees and debt repayments.

According to the latest data from BankservAfrica on the month’s shopping trends, average consumer card transaction value increased by 1.4 percent year on year compared with a 5.6 percent rise a year earlier.

“This clearly indicates a cutting back by consumers, as this is about 4 percentage points below the inflation rate. Many department stores had a hard time with clothing, books and music sales which all grew average transaction values below the inflation rate,” said Mike Schussler, the chief economist at economists.co.za.

Besides most of the retailers closing on December 15 in honour of Nelson Mandela’s funeral, recent trading updates reflected slow growth in sales, another indication of how hard-pressed consumers were.

As far as debt repayments were concerned, debt restructuring firm DebtBusters said last week that it was receiving three times as many applications for debt counselling monthly compared with those in 2008/9.

Statistics released by the National Credit Regulator last year showed that 4.2 million out of the 20.29 million credit active consumers in South Africa had accounts in arrears for more than three months.

Retail analysts have labelled the major retailers’ latest sales growth figures as poor, with the exception of Clicks, Woolworths and Mr Price.

Shoprite disappointed, with retail sales at its local supermarkets for the six months to December rising 7.6 percent, lower than the 11.5 percent rise in the previous corresponding period.

Truworths’s retail sales grew 7.1 percent to R5.9 billion for the six months to December, less than half the 14.8 percent pace recorded a year earlier.

A survey of more than 20 shopping centres across the country by the SA Council of Shopping Centres showed that regional centres saw a slight increase in foot traffic.

“While it is too early to make any final prediction on mall turnovers in December 2013, with many reporting little change in foot traffic figures from the previous year, the overall results aren’t likely to show massive growth if one considers retail sales updates released in early January 2014,” council chief executive Amanda Stops said.

According to BankservAfrica, the average ATM withdrawal increased by only 1.3 percent compared with December 2012, as did credit card transactions.

Recreational average transaction value fell by about 21 percent, reflecting erosion in discretionary income.

Schussler said the average value of all card transactions at service stations showed that, on average motorists spent R488.70 every time they stopped at a service station. This was an increase of 3.9 percent while the price of petrol increased by 9.8 percent in Gauteng.

He said this indicated that the average petrol stop resulted in 39.3 litres of fuel being put into a car in December 2012 and only 37.1 litres in December the following year.

“Motorists are, therefore, using about 2.2 litres of fuel less between service station stops when compared with 2012. This is a good indication that consumers are looking at ways of saving as the economy and the weak rand start to bite. Consumers are still going to feel the pinch of the new increase in fuel price this month.”

The average grocery trolley in the supermarket cost just over R400 in December, which was up by 1.6 percent.

“This also indicates a cutting back by consumers, as this is about 4 percentage points below the inflation rate,” Schussler said.

In contrast with other consumer spending, electricity prices increased by 8 percent year on year and water bill increases were generally in double digits. Interestingly, utility bills increased by 3.5 percent between December 2012 and December last year, BankservAfrica said.

Clothing, book and music sales suffered as transaction values increased below the rate of inflation.

Outlets such as dry cleaners, barbers, jewellery stores and movie theatres were hit even harder and all saw actual transaction values decline in nominal terms. - Business Report