Thanks to recent purchasing statistics, we are able to have a look at the spending landscape of South Africa in the past month. The report, which was published by BankservAfrica showed the consumer spend over the usual holiday period in December last year, reflecting a significant year-on-year increase.
Per what the data suggests, the transaction value of South Africans for December 2018 reached R59 Bn (USD 4,313,578,500), which indicates a 15 percent growth from December 2017’s R51 Bn (USD 3,728,315,424). According to the statistics, there were a total of 106 million transactions, a 12 percent growth on the 95 million volume of transactions in 2017.
December 1 seemed to have been the day with the highest spending, said the clearinghouse’s data, which, however, noted that the spike in volumes could have been contrived by the SASSA grant payouts. We are led to understand that the apex of spending activity in South Africa took place in the build-up to Christmas on 21 and 24 December, where 4.4 million transactions were recorded.
The highest number of successful transactions by a single South African around the period was 659. If the current average earnings and salaries of the country’s citizens have anything to do with that, then credence can be given to such a number.
The bunch of consumer spending, as we noticed from 2017, was done in grocery stores, service stations, restaurants and food stores. Martin Grunewald, the executive head of Payments Business at BankservAfrica, said: While there was a jump in December spend activity between 2018 and 2017, it is interesting to note that this was largely for affordable and essential household items. This is a reflection of the spending pressure which consumer have found themselves in the weakened economy”.
A survey of 7,000 South Africans by lending platform Wonga made us expect that R204 Bn would be spent over the yuletide period. Some 40 percent of those surveyed planned travelling with 75 percent on their way to see friends and family. South Africans between the ages of 18 and 65 were predicted to spend an average of R5 706 each over the festive season.
But it seems the spending culture wasn’t as big as expected. The need to save could have reduced the numbers by more than half, dividing it possibly four times. The R204 Bn expected to be spent according to Wonga, fell to just R59 Bn according to BankservAfrica. While methodologies truly differ, a 2018 mid-year Old Mutual Millennial report showed us something we could heavily fall back to.
According to the report, 24 percent of millennials are currently invested in a unit trust – versus only 2percent among older generations – with 57 percent saying they invested in a unit trust with the purpose of increasing their net worth (1st) and 47percent saying they looked to invest to reach financial freedom (2nd).
The survey also found that 35percent were saving money to pay back debt – while this number was 13percent for older South Africans. It also showed that millennials are more likely to save money – in order of priority – towards travel (37percent versus 10 percent), their education (31 percent versus 4percent), a motor car (32percent versus 11percent) or starting their own business (23percent versus 3percent) – compared to older generations.
Featured Image: Marilyn Pasana