Where are SA shoppers spending their money in 2024?


Amid escalating electricity prices, inflation, and persistent worries about loadshedding, households in South Africa are keeping a vigilant eye on their spending. Groceries stand out as a significant portion of this expenditure, making up 28% of incomes for South Africans, as reported by FNB. Understanding consumer priorities becomes crucial under these circumstances. Leveraging Gathr’s examination of more than a million transactions, Christopher Ball, the co-founder of Finch Technologies, explores the trends and preferences defining grocery shopping behaviors in South Africa.

Grocery store preferences

In South Africa, navigating grocery shopping involves considering multiple factors, including one’s income and personal lifestyle choices. With grocery costs being the second-largest monthly expense for many, following loan repayments, it’s crucial to grasp spending trends, whether purchases are made online or in physical stores.

The African Bank’s Consumer Research Report of 2023, which examines the spending habits of the lower and middle-income brackets, reveals that Shoprite and Pick ‘n Pay are the preferred grocery retailers among various consumer segments. Spar comes in as a close third in the preference rankings.

Average basket sizes and spending patterns

The spending habits and average purchase sizes of households in South Africa differ based on their fixed costs and available spending money. Insights from Gathr offer a glimpse into the consumer spending behaviors at major retailers such as Shoprite, Checkers, Woolworths, and Pick ‘n Pay. Shoprite and Checkers lead the retail market, capturing 62% of total purchases, whereas Woolworths and Pick ‘n Pay have established their presence with market shares of 11% and 26.6%, respectively.

 A detailed examination reveals that customers at Pick ‘n Pay typically spend more than R420 per shopping trip. In terms of larger-than-average purchase amounts, Shoprite’s clientele may spend more than R17 000, raising questions about the customer base—whether they’re purchasing supplies for their restaurant ventures or for resale in local spaza shops.

In-store vs. online delivery preferences

The trend towards online grocery shopping is becoming increasingly pronounced in the South African market, influenced by technological advancements that enhance consumer experiences. Platforms for managing deliveries, such as Loop, along with logistics providers like Pingo, are refining the online delivery offerings for South African retailers.

 Kimberley Taylor, Loop’s co-founder, notes, “Success in on-demand deliveries involves numerous factors – it’s a collective effort. Yet, technology plays a crucial role, aiming to simplify, offer visibility, and boost efficiency for everyone in this segment of the supply chain, including technologies that interface with consumers, drivers, back-office staff, and customer support teams.” 

These platforms are pivotal in the success of services such as Checkers Sixty60, witnessing a gradual increase in their utilization, with Sixty60 orders representing 12.2% of Checkers’ total sales. This trend reflects the changing lifestyles of consumers and the benefits provided by digital solutions.

Cashback Trends

For many consumers, the reality of ATM withdrawal fees prompts a search for alternative methods to reduce expenses. A popular strategy involves utilizing cashback options at checkout counters. Major retailers such as Checkers, Shoprite, Pick ‘n Pay, and Boxer provide cashback services, using them as a lure to draw in more shoppers. 

While withdrawing R1000 from an ATM might cost R10 with banks like Capitec, opting for a cashback transaction at a grocery store usually incurs a much lower fee, about R2. However, it’s important to note that there are typically limits to how much can be withdrawn in a store. This trend indicates a move away from traditional ATM use towards more streamlined and efficient payment methods, as customers increasingly look to cut down on transaction fees wherever possible.

Timing of Monthly Shopping Cycles 

The patterns and regularity of supermarket visits are closely linked to the schedules of payday, direct debits, and other monetary commitments, providing insight into the nuances of shopper behavior.

For supermarkets like Pick ‘n Pay, Shoprite, and Checkers, the distribution of shopping activity remained fairly consistent, showcasing spikes in the period from the 26th to the 29th. Meanwhile, Woolworths saw a notable increase in the proportion of customers towards the month’s end.

The benefit of understanding transactions for retailers and banks

At the recent event hosted by Gathr in Johannesburg, two innovative features were presented, promising to revolutionize the way we manage finances. At the heart of the unveiling was the launch of transaction categorization, which delivers a detailed exploration of customer financial activities.

 Equipped with 36 unique categories, this functionality offers unmatched clarity on expenditure trends, sources of income, and fiscal obligations.

Implications for Retailers

These insights not only have implications for individual shoppers but also significantly impact the retail and hospitality sectors at large. As consumers’ tastes and preferences shift, it becomes crucial for retailers to adjust their strategies accordingly to align with these new demands. 

The initiative by Woolworths, through its Now Now service, to step up its game and enter into direct competition with the hospitality industry is a testament to this changing dynamic. With fast-food chains such as KFC and Chicken Licken ready to leverage these evolving consumer preferences, the stage is set for a surge in innovation and strategic shifts within the market.

The journey from the physical shelves of grocery stores to the virtual carts of online shopping encapsulates a narrative of financial choices and decision-making. Utilizing platforms like Gathr allows stakeholders from various sectors to move through this evolving landscape with greater ease and insight, fostering innovation while enabling consumers to make choices that enhance their financial health.


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