According to the State of the Retail Nation, South African consumes have spent R354 billion on food and liquor. Picture: Supplied
South Africans have spent R354 billion on food and liquor for the past 12 months, ending September 2024, according to the State of the Retail Nation report by NIQ South Africa.
The report also showed that consumers spent R274 billion on other goods including non-alcoholic beverages, that include personal and healthcare products, snacks, home and pet supplies, baby food and care, and tobacco products.
The most recent quarter has seen year-over-year growth of 2.6% which translates to a sales value change of R6.7 billion compared to Q3 2023.
“Essential expenditure remains an imperative, with consumers prioritising spending more on utilities and education, above grocery and household items. In the FMCG sector, we see particular emphasis on Fresh Produce, Health & Wellness, and Fresh Meat,” Zak Haeri, MD, NIQ in South Africa said.
“Fresh and perishable goods continue to see improved sales volumes due to lower levels of load shedding. Liquor and ambient food are experiencing the greatest incremental growth, driven specifically by beer and frozen meat.”
Loyalty programmes, promotions and essential spending are the factors that are driving consumer decisions, according to the report.
Consumers are increasingly choosing pack sizes that either moderate immediate spending (smaller packs) or offer long-term savings (larger packs) in order to stretch their rand further.
The report showed that private label products have gained a 20 basis points share in value, with the top five manufacturers receiving the most gains.
According to the report, within the next six to 12 months, the value of private label FMCG sales will go over R100 billion in annual sales.
Haeri said: “The anticipated growth in the Private Label segment and the resilience of the mainstream market reflects the adaptability of South African consumers and ongoing developments in the economy.”
“Moving forward, continued focus on consumer preferences and financial strategies will be essential for FMCG retailers and manufacturers to navigate the complexities of the current market.”
According to the report, there has been a positive shift in consumer sentiment throughout the year.
NIQ’s data shows that 42% of SA consumers believe they are in a better financial position than they were a year ago.
However, they continue to face challenges like higher costs of living, low wage growth and unemployment.
The report showed that 33% of consumers feel worse off. The reasons for this sentiment included increased living costs (80%), the economic slowdown (54%), and concerns regarding job security (39%).
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