Picture: iStock.
Despite the astronomical rise in living costs this week, research shows that South Africans are expected to spend R250 billion this festive season.
That’s a 20% increase from last year, according to an annual Summer Spending Survey of 6,700 participants, by short-term lender Wonga.
There was a 15% decrease in Christmas spending since 2019, but now it appears that festive season spending is back to pre-Covid-19 levels.
South Africans are budgeting an average of R6,326 each for extra expenses over this period, compared to R5,673 in 2020.
At least 37% of people think they’ll spend more this festive season than they did in 2020, while 41% of them feel they were more financially secure last year.
“The increase in predicted spend overall is significant, and the figures this year are encouraging, reflecting the upward trajectory of the economy,” said Wonga content manager Bryan Smith.
“The survey was conducted before the recent announcement of the discovery of the new Omicron variant. This has unfortunately dealt a blow to optimistic hopes that the local economy would enter 2022 on a firmer footing,” he added.
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Over two-thirds of South Africans are planning a staycation around the braai this festive season, due primarily to being unable to afford the extra expenses and the Covid-19 pandemic.
Just under half of them said they were reliant on year-end bonuses to manage the extra expenses, and online shopping preferences appear to be growing since 2018.
The research revealed that food and drink would take up 31% of most budgets, at an average cost of R1,984 per person.
Christmas gifts will eat up at least 18% of festive budgets, with South Africans spending around R1,188 each to spoil their loved ones.
But 43% of the survey participants said they planned to spend less than they did last year. But they may also resort to digging into savings, stokvels, credit cards and even take out short-term loans to carry them this festive season.
The ongoing pandemic and affordability have influenced people’s travel plans, with 48% of people choosing to stay at home over the festive season.
According to the survey findings, 22% are spending Christmas at the office.
“We have seen a slight decrease in predicted spend travel overall, with only 2% planning to travel overseas this year, compared to 0,58% in 2020 and 5% in 2019,” Smith said.
At least 22% of them will be travelling to KwaZulu-Natal, which has emerged as the most popular holiday destination for the third-year running, followed by the Western Cape (18%) and the Eastern Cape (17%).
The vast majority (59%) said they would be travelling by car, 17% taking the bus, and 11% flying to their destinations.
61% of participants said they were travelling to visit family and friends.
The majority of South Africans plan on buying gifts this festive season.
77% plan to buy their family members gifts – up from last year’s 75%, but still down from 83% in 2019.
Interestingly, 21% also plan on buying themselves a gift this Christmas.
46% of people said their relatives would find cold-hard cash or gift cards under the Christmas tree.
21% of respondents plan to shop online – up from 13% in 2019, nearly double the 11% of respondents who indicated similarly in 2018.
“This has likely been driven by an increase in e-commerce, driven by lockdown and changing purchasing habits driven by the pandemic,” said Smith.
“This year has been a somewhat better one for some people; however, South Africans are more cautious about spending their money, especially in the wake of recent developments involving the new variant,” said Smith.
“Respondents gave 2021 a rating of 5 out of 10, compared to last year’s score of 3, and 61% of people say they are optimistic or excited for 2022.”
Compiled by Narissa Subramoney
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