SOUTH AFRICA – In the past 12 months ending September 2024, South Africans spent a total of R354 billion (US$19.96B) on food and alcoholic beverages, reflecting the nation’s shifting consumer spending patterns amid economic challenges.
The data, drawn from NIQ South Africa’s State of the Retail Nation report, also indicates a further R274 billion (US$15.45B) was spent on other goods, including non-alcoholic beverages, healthcare products, home and pet supplies, baby care items, snacks, and tobacco products.
The report highlighted a 2.6 percent year-over-year growth in total spending during the most recent quarter, equating to a sales value increase of R6.7 billion (US$377.7M) compared to Q3 of 2023.
Zak Haeri, Managing Director of NIQ South Africa, noted that consumers are prioritizing essential expenditures such as utilities and education over groceries and household items, showing an increased emphasis on items like fresh produce, health and wellness products, and fresh meats.
“Fresh and perishable goods continue to see improved sales volumes due to lower levels of load shedding,” Haeri said. “Liquor and ambient food have shown the greatest incremental growth, particularly in categories such as beer and frozen meat.”
Consumer behavior is increasingly influenced by loyalty programs, promotions, and a focus on essential spending.
According to NIQ’s findings, consumers are selecting pack sizes that either reduce immediate spending (through smaller packs) or offer long-term savings (through larger packs), as they aim to maximize their spending power.
Private label products have gained popularity, capturing an additional 20 basis points in value share, with the top five manufacturers seeing the most gains.
NIQ projects that within the next six to twelve months, private label sales in the FMCG sector will surpass R100 billion (US$5.6B) in annual sales.
Haeri emphasized the significance of these trends, stating, “The anticipated growth in the private label segment and the resilience of the mainstream market reflects the adaptability of South African consumers and ongoing developments in the economy.”
Consumer sentiment has shown a positive trend over the year, with NIQ data revealing that 42 percent of South Africans feel they are in a better financial position than last year.
However, economic challenges persist. Rising living costs, limited wage growth, and high unemployment remain key issues, with 33 percent of consumers reporting feeling worse off.
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