To get a sense of the real state of the nation, look no further than what South African consumers are putting into their shopping trolleys.

It seems most of us have become more thrifty, seeking out the best value for money — and we’re not spending much on nice-to-haves.

The latest NIQ South Africa’s State of the Retail Nation report shows that consumers have not only cut back on the number of visits to the shops, but they are also not making “big shops” — spending on average R542 per trip.

Five years ago, consumers were visiting shops at least six times a month. Now, they’re only averaging four trips a month, as rising transport, utilities and food costs weigh on spending. Added to that is the increasing rate of unemployment, which Stats SA revealed last week ​​had risen to 32.9% in Q1 of 2024.

Most expenditure is on the ambient foods category (including rice, sugar and long-life milk), soft drinks, beer and frozen meat, while spending on tech and durables is flat, growing only by around 2%.

More consumers are seeking out private-label food products to stretch their rands, and they are also concentrating more of their spending on fewer retailers to maximise their loyalty rewards. For 39% of consumers, buying on promotion is a preferred saving strategy.

But while the volume of goods sold on promotion (31%) has risen in recent years, NIQ expects this to decline into the new year because retailers and manufacturers need to protect their profits.

South Africa’s top 10 manufacturers contribute more than 50% of branded goods sales, compared to 30-40% in Europe.

Fast-moving consumer goods (FMCG) trade sales rose by 7.7% in Q1 of 2024 to R112-billion, up by 7.3% year-on-year.

NIQ’s full-year data for last year revealed that SA’s FMCG sector is worth around R452-billion, which suggests it is growing by about 8.8% a year.

Read more in Daily Maverick: Consumers are tightening their belts in the fast-moving consumer goods sector

Zak Haeri, managing director for NIQ South Africa, says as CPI and food inflation have started to moderate in recent months, consumers may start to regain some of their purchasing power, noting that 44% of consumers believe they are financially worse off than a year ago and nearly all have changed their FMCG shopping habits to save money.

The consumer technical goods segment is flat, although online sales are growing faster than traditional brick-and-mortar stores.

Caffeine commiseration, tech falls flat

It seems South Africans love their coffee machines, though: These appliances are selling particularly well, with sales growth of 16.1% year-on-year.

“Consumers decided that there was no better way to address whatever developing crises 2024 held — energy, water, cost of living, elections — than with a coffee,” says Haeri.

While sales of tech and durables have only grown by 2%, there is vigorous competition across most product categories as consumers show more willingness to explore alternate brands to find the best value for money.

Haeri says this trend is especially evident in the smartphone market, which experienced flat unit growth for the quarter, although Chinese brands in this product category were strongly up, growing unit sales by 93.6%.

Even wealthier consumers were opting for less expensive devices.

“Innovation is attracting prepaid and postpaid consumers alike to seek better value. It’s not just entry-level and mid-market consumers that are embracing Chinese consumer brands — it’s premium customers too.”

The Marketing Research Foundation’s latest Marketing All Product Survey data, done in partnership with Plus 94 Research, also reveals that South African households are battling amid rising costs of basic goods.

Data showed significant declines in expenditures for discretionary purchases like dining out and cinema visits, although alcohol sales have remained fairly constant. Beer and wine remain the biggest sellers. Consumers are also buying fast food and eating out less often than two years ago.

Cheaper DStv packages are now making up the bulk of their subscriber base, which suggests that price has become an issue with their top and middle-tier customers, says the report, and a significant number of people no longer have savings or investments.

There has been an overall decline of 39% in savings and investments over the past two years, which implies that South Africans have less disposable income to do so.

Consumers are also less loyal to brands: last year, only 26% reported always buying the same brands of groceries; 32% the same toiletries, and 36% the same cosmetics. DM