Absa: Online shopping becomes new norm in South Africa
Consumer spending in February showed signs of stabilisation following the contraction in January. The month-on-month (MTM) fall in card spending slowed from 22 per cent in January to 10 per cent in February, and volumes dropped from 15 per cent to 6 per cent. The average value per sale slowed by only 4 per cent from 8 per cent in January. The shift shows that consumers are regaining financial stability after imposing austerity measures in the post-festive season. CNBC Africa is joined by Chipo Masawi, Senior Coverage Banker, Absa CIB for more.
Wed, 16 Apr 2025 11:34:14 GMT
Disclaimer: The following content is generated automatically by a GPT AI and may not be accurate. To verify the details, please watch the video
AI Generated Summary
- The month-on-month fall in card spending slowed from 22% in January to 10% in February, reflecting a potential recovery in consumer confidence.
- Year-to-date figures for February 2025 compared to 2024 indicate a notable slowdown in spending across various categories, highlighting continued pressure on consumers.
- The township economy is evolving, with a shift towards digital payment platforms and mobile money as consumers prioritize affordability and value in their purchases.
Consumer spending in South Africa has been closely monitored in recent months, with February showing signs of stabilization following a contraction in January. According to the latest report from Absa, the month-on-month fall in card spending slowed from 22% in January to 10% in February. Chipo Masawi, Senior Coverage Banker at Absa CIB, highlighted several factors contributing to this trend, including the impact of post-holiday austerity, calendar effects, and retail promotional strategies. In addition, year-to-date figures for February 2025 compared to 2024 indicate a notable slowdown in spending across various categories. Masawi noted that consumers are still under pressure due to factors such as rising electricity prices, VAT increases, and stagnant wage growth. The current consumer sentiment remains cautious, with affordability and value becoming key priorities for shoppers. Retailers are advised to adapt to these changing consumer behaviors by offering competitive prices and value-driven options. The township economy, seen as a frontier for growth, is also evolving, with a shift towards digital payment platforms and mobile money. As consumers navigate uncertainties around tariffs and budget announcements, understanding their spending habits and preferences will be crucial for retailers moving forward.
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