SA consumer spending habits changing amid sluggish economy

South African consumers are feeling the pressure of the sluggish economy with rising food prices, fuel costs, and electricity tariffs. According to a recent report by NICU, 99% of South African consumers have changed their shopping habits in response to these economic challenges. Kim Reddy, the CMI lead for NICU in South Africa, shared insights from the report in an interview with CNBC Africa. The report reveals that consumers are tightening their belts and being more selective about where and how they spend their money. With the economy slowing down and job security becoming a concern, 44% of consumers feel they are in a worse financial situation. The high unemployment rate in South Africa is exacerbating the economic challenges that consumers are facing. In response to the tough economic conditions, consumers are focusing on essentials and cutting back on luxuries. They are becoming more creative in their shopping approaches, such as seeking out promotions, buying in bulk, and opting for private label brands instead of branded products. This shift in consumer behavior is evident across all income groups, indicating a widespread impact of the economic challenges. Despite the current difficulties, South Africans remain optimistic about their financial future. Many are hopeful that salaries will increase, and they expect the overall situation to improve. However, looming challenges like the impending 12% hike in electricity prices in April are likely to put additional strain on consumers. The resilience and optimism of South African consumers are commendable, but the reality of the tough economic conditions is forcing them to make significant adjustments to their spending patterns. As the country heads into elections and faces economic uncertainties, the future remains uncertain for many South African households. Kim Reddy emphasized that monitoring consumer behavior and economic trends is crucial to understanding the challenges faced by South African consumers. The report highlights the need for policymakers and businesses to respond effectively to the changing consumer landscape and provide support to those most affected by the economic downturn.