Festive spending continues to boom amid tough economic climate

The end-of-year season is associated with holidays, socialising with friends and entertaining family. It is also the month when the most pourable custard and two- litre soft drinks are sold.

Market research company Nielsen tracks retail purchases from retailers such as Shoprite, Pick n Pay, Jetmart and Fruit & Veg City. It says that, along with custard and cool drinks, the average shopper during the Christmas week would have long-life milk, biscuits, bulk chocolates and meat in their basket.

A spokesperson for major retailer Shoprite adds that half of all the retailer’s watermelons sold annually are sold during the month of December and that sparkling wine accounts for 30% of the year’s sales this month. A Pick n Pay spokesperson said that sparkling wine, gin and tonic did very well last year and are again doing well so far this year.

Stats SA figures show substantial retail growth in December, and a drop in January and February.

But the underlying numbers show that, although people are spending more on goods such as food and drinks, they are spending progressively less on more expensive items such as cars and appliances in the past year.

Nedbank economist Busisiwe Radebe points out that, although there is an increase in overall spending, especially during the festive season, most of the sales contributors are nondurable and semidurable items such as food, beverages, furniture and clothing. This, she says, is a sign of a weak consumer.

“If people were doing brilliantly they would have been spending their money on durable goods,” she says. “They would’ve been buying cars and things like that, but they’re not. They’re mostly buying food and beverages.”

Figures from Stats SA confirm that people have been spending increasingly less on expensive items since the last quarter of 2017.

“Those petrol increases earlier in the year, the consumer will start to feel,” Radebe says. “The VAT [value-added tax] increase, even though there are zero-rated goods, you’ll still feel it. The consumer had quite a few things put on them.”

Jacques Coetzee is the Adamela Data Fellow at the Mail & Guardian, a position funded by the Indigo Trust

Jacques Coetzee
Jacques Coetzee
Jacques Coetzee is the Adamela Data Fellow at the Mail & Guardian, a position funded by the Indigo Trust.

The Facebook group taking on South Africa’s white right

Online battle over the ‘white genocide’ narrative on social media has dangerous real-world consequences

Unions slam move to cut wage bill

Cosatu rejects job losses and a wage freeze for public servants, calling this ‘a declaration of war’

Press Releases

Scatec Solar begins another Upington project

SPONSORED Scatec Solar and partners have once again grid connected in the ZF Mgcawu District, and started early...

Over R400-m given to businesses since launch of three-minute overdraft

The 3-minute overdraft radically reduces the time it takes for businesses to have their working capital needs met

Tourism can push Africa onto a new path – minister

The continent is fast becoming a dynamic sought-after tourist destination

South Africa’s education system is broken and unequal, and must be fixed without further delay

The Amnesty International report found that the South African government continues to miss its own education upgrading targets

Business travel industry generates billions

Meetings Africa is ready to take advantage of this lucrative opportunity

Conferences connect people to ideas

The World Expo and Meetings Africa are all about stimulating innovation – and income