South Africans cut back on holiday spending

2014-12-04 08:51

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South Africans will cut back on travel and socialising over the festive season in favour of buying food amid tough economic conditions.

According to Deloitte’s Year-End Holiday Survey 2014: Savvy Spenders on the Rise, consumers are expected to be more pragmatic in their spending habits.

“The average proportion of the consumer budget that will be spent on food has jumped to 44% in 2014 compared with 36% last year, while spending on socialising drops to 13% from 23% in 2013,” Deloitte said.

“Nevertheless, consumers will still allocate a significant portion of their holiday season budget to gifts, with 43% of expenditure going towards presents in 2014, roughly similar to last year’s 42%.”

Rodger George, Deloitte African consumer business leader, said 66% of South African consumers surveyed indicated they would spend more on essential household expenses, such as electricity and groceries, this year.

“Consumers are showing signs of conservatism as general day-to-day living expenses continue to rise while consumers try to stretch their budgets as far as possible.”

South Africans’ spending trends appeared to mirror those in Europe, where consumers were also grappling with poor economic growth.

Deloitte said food (40%) and gifts (39%) were expected to be the largest share of consumer spend in Europe, and travelling (12%) and socialising (9%) were secondary.

“This year’s Deloitte Holiday Survey indicates that South African consumers are becoming increasingly concerned about the strength of the domestic economy,” the accounting firm said.

A total of 56% of respondents held a negative view of current economic conditions, compared with 53% last year.

“South Africans are, however, less negative about the current economic climate than they were during the recession in 2008 and 2009,” Deloitte said.

“Although only 26% of South Africans believe the economic environment will be positive next year, this is still significantly better than the 19% of Europeans who are upbeat about economic conditions in 2015.”

South African men were significantly more positive about economic prospects next year, with 33% of men holding a positive view compared with 19% of women.

South Africans have also ditched chocolate for cash as the number one gift they are most likely to want to receive.

“No less than 39% of respondents indicated this, compared with 36% last year, followed by chocolates (38%), books (36%) and clothes or shoes (34%).

Gift expectations also differed starkly depending on demographic profile, with 18 to 34-year-olds ranking cash as the most preferred gift, while the 35 to 64-year-olds favoured books this festive season.

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