Load shedding: more take-aways, non-perishables bought online

Load shedding is forcing consumers to buy more take-away food, buy non-perishables instead of fresh food and buy their food online.

According to PwC’s latest Global Consumer Insights Survey Pulse 6, rolling power cuts resulted in consumers spending less, while investment decisions were affected by diminished business confidence and negative international perceptions which restricted foreign investment.

Anton Hugo, PwC Africa retail industry leader, says retailers’ spending to support infrastructure will potentially impact two key areas: their ability to service debt and their ability to seek out growth opportunities.

The added costs of diesel and load shedding-related losses, such as spoilt goods, are not easily passed on to consumers who are already financially constrained, he says. The primary factors driving consumers’ negative sentiment were food quality, stock availability and expired produce.

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Load shedding also affected consumer behaviour in several ways, with more than 50% opting for non-perishable products and items that makes them less reliant on electricity. The demand for takeout and foods that are convenient to buy also saw a significant increase, with 40% of respondents opting for this way to avoid having a cold supper.

Buying online due to rolling blackouts

Buying online also increased, with 31% of respondents, predominantly younger generations, lacking access to alternative energy sources choosing to buy more items online due to load shedding. “This underscores the importance for retailers to enhance their online presence and cater to the needs of this important consumer segment,” Hugo says.

Gen Zs use search engines and retailer websites to make more informed buying decisions and rely more on social media for information about products and services. Hugo says this means that retailers should carefully consider how to effectively leverage these platforms to maximise their appeal to consumers.

“We have seen that smartphones play a crucial role in facilitating smart shopping and enhancing the ‘phygital’ shopping experience, which involves a seamless blend of digital and physical shopping,” Hugo says.

With retailers across South Africa facing numerous challenges, from rolling blackouts and limited economic growth, to rising interest rates and a high unemployment rate, it is evident that their approach to consumers must consistently evolve to grow market share and a greater share of a strained consumer wallet.

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Half of the respondents across Africa said they plan to increase their online shopping activity in the next six months and according to PwC’s South African Retail Sentiment Index, retailers that successfully shifted their focus to the digital space received overall positive feedback regarding their digital facilities.

“This indicates that these services, along with campaigns promoting digital retail offerings, resonated well with customers but consumer sentiment towards digital facilities is still somewhat negative, showing that the overall shopping experience created by online and delivery services has room for improvement,” Suleman Jhavary, PwC South Africa Operations Transformation Leader, says.

In-person shopping still popular

While technological enhancements are important to provide a frictionless retail experience, consumers still value in-store staff support, even those who embrace technology. Jhavary says retailers continuously develop their service operating model to empower frontline staff with the necessary skills, visibility and access to integrated technology driven by consumers’ desire for phygital experiences.

The survey also noted an appetite for direct purchases in South Africa, with half of consumers buying directly from a brand’s website and 40% open to considering buying directly, with clothing, accessories and electronics the most popular categories.

The primary reasons consumers gave for buying or planning to buy directly include knowing products are authentic, the perception of greater product choice and availability.

Spending trends did not look much different this year, with a significant proportion of consumers planning to reduce their spending across all retail categories with the exception of groceries, where 56% of consumers in South Africa expect an increase in spending.

“A primary driver for this is the additional financial strain in the form of more expensive credit resulting in less disposable income,” Hugo explains.

Consumers are also continuing to display a strong preference for products aligned with specific sustainability values, with many willing to pay up to 10% above the average price for products that have a lower carbon footprint (49%), are locally produced (48%) and are biodegradable, allowing for home disposal (48%).