Consumers feeling down
State of the economy and job security are the major worries, Nielsen survey finds
THE LATEST Consumer Confidence Index, for the fourth quarter of 2018, shows a two-point decrease to 88, presenting a relatively stable, although slightly negative, quarter-on-quarter picture of consumer sentiment in South Africa.
This was supported by a decrease in the number of South Africans who view their job prospects as excellent or good. There was a one-point decline to 33 percent, compared with the previous quarter.
There was a one-point drop, to 61 percent, in the number of South Africans who said the state of their personal finances over the next 12 months would be excellent or good.
However, there was a slight respite when it came to spending intentions. With a two-point increase, 29 percent of consumers felt now was a good or an excellent time to buy what they needed or wanted.
When it came to the ongoing concerns of the average South African, 88 percent thought the country was in a recession, versus 79 percent in the previous quarter.
In terms of major concerns, the economy ranked number one, with 28 percent of South Africans worried about it, followed by job security at 26 percent, crime at 23 percent, and rising food prices at 20 percent.
Nielsen South Africa Connect managing director Kerith Botha said: “South Africans are clearly feeling the squeeze as they struggle to deal with their dayto-day financial commitments, while at the same time being highly aware of the bigger economic picture. This has been adversely affected by a series of setbacks, including power generation, which may explain consumers’ preoccupation with the state of the economy.”
In terms of how they’ve adapted to this stark reality, 85 percent of South Africans said they have changed their spending habits to save on household expenses. The main thing they have done to save money was to cut down on takeaway meals (72 percent of respondents), followed by spending less on new clothes (59 percent), and spending less on out-of-home entertainment (57 percent).
When it came to how they budget in the average month, most money was allocated to food and beverages at home (19 percent), and the same percentage went towards housing (rent, mortgage bond, and utilities), and 10 percent towards routine transportation (car, petrol, non-vacation commuting).
Interestingly, South Africans allocated the same percentage of their budget (8 percent) to education as they did to communication services, such as a cellphone, landline, internet and satellite TV.
Only 21 percent of respondents said they have spare cash at the end of the month, although this was two points up from the previous quarter.
In terms of their spending priorities once they have met their essential living expenses, most respondents (42 percent) said they put their money into savings, while 38 percent paid off debts, credit cards and loans.
Twenty-five percent of respondents said they spend any spare cash on new clothes, while 22 percent said they spend it on holidays. This might be due to the year-end festive spirit having induced consumers to splurge a bit.
Elaborating on these results, Botha said: “South Africans are financially constrained and therefore prioritise saving and paying off debt. However, they’re also seeking relief from the mundanities of everyday life by spending on new clothes and going on holiday. This is a sign that they’re determined to enjoy life despite the financial challenges they face.” | Nielsen Africa