South Africans could spend R224 billion this festive season

Did someone say festive season shopping? South Africans are seemingly gearing up to splurge this December – however, there might be some reservations.

Results from Wonga’s Summer Spending Survey reveals SA customers will spend an estimated R224 billion over the upcoming holidays.

Despite the impressive figure, the data collected from 12,000 respondents, indicates a 4% decline year-on-year in predicted average festive spend.

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Significant changes

Last year, the average shopper was expected to spend R 5,968 for extra festive season expenses, but the amount has decreased to R 5,707 in 2023.

This is the second year of festive spend shrinkage and is down by R619 per person in 2021, according to the survey.

The short-term loan provider also observed the contrast in festive season spending habits per income band.

While households making more than R50,000 monthly won’t spend more than 25% of their income, those earning below R2,999 will spend more than 188% over the festive season.

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Hard earned, hard spent

So, what exactly will SA spend their hard-earned money on?

Wonga’s survey indicates that food and beverages will account for 33% of consumers’ festive season spend, with the average person spending R1,907, down from R2, 235 in 2022.

Head of Marketing at Wonga, James Williams observed some notable changes in consumer buying preferences.

“There is a growing awareness among South Africans about prioritising necessities over luxuries,” said Williams, adding that responses from the survey had confirmed the shift in consumer preferences and priorities.

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Quiet roads ahead?

Historically, the December period was the perfect time for most South Africans to go on vacation. However, most people might hit the pause button on the annual tradition this year.

High fuel prices amid ever-rising living costs have led many to simply skip the highway this year.

Only 21% of participants said they would be travelling over the summer holidays, the lowest proportion recorded since the survey was started in 2018.

“Of the 79% not travelling this year, nearly half say they simply cannot afford it,” Williams said.

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What savings?

South Africa’s record-high inflation saw many households turning their pockets inside-out to get through the month.

Meanwhile, others resorted to loans in desperate attempts to stay afloat. The trend is expected to continue into the festive season.

“The growing reliance on credit cards and loans to fund festive expenses has risen from 27% to 32% this year – indicating the impact of inflation on consumers’ pockets,” Williams said.

According to the survey, only 37% of consumers will use their savings to get through the festive season, a three percent decline from 2022.

“This year’s survey shows that South Africans are tightening their belts with some relying on their year-end bonuses and others relying on credit to cover the extra expense over the festive period,” said Williams.

“There is an expected decrease in predicted spend this year, confirming the serious impact of the rising cost of living and inflation on household budgets,” he concluded.

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