How middle-class South Africans are spending their money

2 years ago 1

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With high levels of inflation and ever-worsening load shedding, South Africans continue to spend a large amount on groceries and entertainment, such as eating out.

FNB’s card data shows that consumers are spending 28% of their income on groceries, up from 27% last year.

Entertainment has also gone up from 11.5% last year to 12% this year.

Overall, the top 3 spending categories include groceries, transportation, and entertainment.

Lytania Johnson, CEO of FNB Personal Segment, consisting of entry-level to middle-income customers, said that “food and transport generally make up a significant portion of spend among many consumers, especially those in these income segments.’

“Therefore, any increase in costs in these categories will always require households to review their monthly budgets. Unfortunately, food costs have largely been influenced by local and global economic factors that consumers cannot control.”

Senzo Nsibande, the FNB Card CEO, said that it was unsurprising to see food and fuel as the highest contributors on the list due to the nation’s high levels of inflation.

“Interestingly, in the entertainment category, we see largely middle and affluent-income consumers spending more on out-of-home experiences such as eating out, going to movie theatres, and bookstores, among others,” Nsibande said.

“This may be due to a combination of factors, such as people finding ways to mitigate the impact of load shedding on domestic activities and an increasing desire to spend time outdoors.”

Shake up for consumers

Although FNB’s data shows that South Africans are spending slightly more of their income on their groceries, a recent study from TrendER/infoQuest found that roughly three out of four respondents were purchasing fewer groceries to reduce food waste as load shedding affects fridges.

67% of respondents also said the types of meals they prepare have changed dramatically due to load shedding.

Furthering Nsibande’s point, 48% of the respondents in the TrendER/infoQuest study said they eat out more as they cannot cook during load shedding.

Below are some of the results from the study: