Finances and economy cause anxiety for SA consumers: Deloitte report

The report found net anxiety levels decreased in South Africa as compared to the previous year. Picture: Independent Newspapers.

The report found net anxiety levels decreased in South Africa as compared to the previous year. Picture: Independent Newspapers.

Published May 11, 2024


Personal financial situations and the economy’s direction are still the primary cause of anxiety among South Africans, according to the Deloitte Consumer Signals Report for the first quarter of 2024.

Despite this, net anxiety levels had decreased in South Africa as compared to the previous year, the report found.

"It is noteworthy that political uncertainty is on the rise, which may be attributed to the upcoming national elections scheduled for May 2024," it said.

The report stated that 87% of South African respondents continued to be concerned about rising prices for everyday purchases, similar to a year ago.

"Most categories are showing an upward trend, this could be due to a recent increase in inflation. According to StatsSA, the highest year-on-year price increases in February 2024 were food and non-alcoholic beverages (6.1%), housing and utilities (5.8%), and transport (5.4%). The transport cost increase can be attributed to the rise in fuel prices in February driven by the weak rand and higher international oil prices," it said.

Deloitte Africa acting chief economist, Hannah Marais, said these anxieties were to be expected due to the looming elections on May 29, and headline inflation remaining stubbornly high with extra inflationary pressures still likely due to the impact of a weakening rand, coupled with potential food inflation and other hikes in living expenses brought on by further fuel increases.

According to the report, with shrinking discretionary income, South Africans are prioritising expenses such as groceries – making 14% of the share of wallet, followed by 13% on housing, and a surprising 11% on entertainment and leisure travel.

Deloitte Africa consumer industry leader, Rodger George, said: “As South African consumers remain under pressure, most of their budget goes towards essentials; however when consumers want to treat themselves, they often splurge on food and beverages".

The report found the shrinking budget allocation on critical items concerning, with only 7% of the share of wallet being used for education and 6% on healthcare. Also alarming was that saving and investing remained at the bottom of consumers' priorities, only making up 6% of spend.

The survey found that many people continued to resort to cost-saving measures due to the high cost of living.

"The trend of frugal behaviour from consumers continues, with consumers focussing on buying essential groceries, reducing food waste, and cooking more meals at home to save costs.

"Consumers are also indicating a willingness to continue to fill their baskets with house brands and popular name brands when doing their shopping," it said.

George said as South African consumers remained under pressure, most of their budget was going towards essentials; however when consumers wanted to treat themselves, they often splurged on food and beverages.

"The persistently high cost of living has forced South Africans to become frugal consumers trying to avoid unnecessary and costly food wastage," George said.

The report said the most significant obstacle to leisure travel in South Africa was affordability and a lack of disposable income, as 85% of respondents stated that they could afford to travel. Additionally, 30% of respondents were opting to allocate their money towards other expenses instead of travel.

"Given that leisure travel is still considered a luxury in South Africa, it is probable that many consumers will choose to spend quality time with friends and relatives in local environments or travelling within South Africa," it said.