Consumers in South Africa, hit by rising living costs and growing job insecurity, are showing marked changes in their spending patterns, a new study shows.
Market researchers Borderless Access found that 81% of consumers have simply cut spending on essential items, or switched to more affordable brands and products because of the cost of living.
Rising costs and the woeful state of the economy have, unsurprisingly, also affected spending on non-essentials, even though prices in this category have not seen sharp rises, and even price falls in some cases.
Just 7% of consumers said their spending on non-essentials had remained the same, compared to 84% who said they had either cut spending or switched to more affordable brands or products.
Spending on big-ticket items has also been hard hit. The survey showed that 51% of people had either put on hold or cancelled plans to for large purchases, such as a car, a house or jewellery.
Consumers have been especially hard hit by huge surges in the cost of fuel and electricity.
The troubled state-run electricity company ESKOM has tripled the cost of electricity in the last ten years and South Africans face frequent power cuts. Around 57% of those asked said the cuts had had a negative impact on their earnings, either directly or indirectly.
Power is not the only cost to show steep rises. The cost of fruit was up nearly 9% year-on-year between 2019 and 2020, and bread and cereals rose 6%.
Beyond rising costs and high unemployment and job insecurity, South Africans have also been impacted by a shortage of drinking water. A severe drought hit the country in 2018, and has since been exacerbated by power cuts – 25% of those surveyed said they are still affected by a shortage.
According to official figures, two-thirds of the 1.2 million people in South Africa who enter the labour market annually do not find work or receive further training. Some 90% of respondents to the Borderless Access survey said they felt anxious about job security, and over 50% said they either plan to, or are considering, leaving the country in search of a better life.
Only 30% of people said they felt optimistic about the country’s economic prospects.
Sourced from Borderless Access
