According to a recent Nielsen Shoppergraphics Report, based on the purchasing behaviour within 4,000 representative households across the country, South African households have been hard-hit by recent price increases – to the point where consumers remove up to three grocery categories from their repertoire and reduce shopping frequency.
Spiralling petrol and electricity costs, the implementation of sugar tax and a VAT increase to 15% has seen shoppers bombarded by a storm of rising prices and shrinking shopping baskets. They are consolidating spending by taking some drastic steps that include:
- Consumers spending more on dry groceries and perishables with staples remaining stable.
- The highest amount of spend is happening in frozen chicken and ready to eat cereals, sugar and UHT milk (a long-term trend) and canned meat. According to the survey, the latter might be because of the listeriosis crisis earlier this year which compelled many consumers to switch from cold meats, which saw a big drop.
- Household/cleaning goods which are no longer seen as a necessity have dropped by 6% – one of the biggest changes in consumer spending.
- Beverage sales have also dropped by 6% – with carbonated soft drinks experiencing particularly negative performance. Contributing factors may well be the shift in volumes from 500ml to 450 ml size bottle within some of the top brands as well as an influx of other brands carving out a market share for themselves and now spreading their national footprint, says the survey.