South Africans are anticipated to spend an estimated R224 billion during 2023’s festive season, according to the sixth annual Summer Spending Survey by short-term lender, Wonga.
With data collected from over 12 000 respondents, 2023 reflects a 4% decrease year-on-year in predicted average festive spend, coming in at R5 707 per person compared to R5 968 in 2022 – the second year of festive spend shrinkage and down by R619 per person in 2021.
The percentage of monthly earnings versus festive spend declines through each income band, coming in at less than 25% for those earning more than R50 000 per month. For those earning up to R2 999 per month, festive spending will take up to as much as 188% of their monthly earnings.
Food and beverages make up over a third of expenses with money and vouchers top of everyone’s gifting wish lists
2023’s statistics show that food and beverages will account for over 33% of people’s festive season spend with an average spend of R1 907 per person versus R2 235 in 2022 – a clear indication of the growing cost of living crisis, with households needing to spread their budgets to pay for essentials and cover debt.
Gifting will make up 16% of the festive budget, with money and shopping vouchers being the most popular (68%). Interestingly, grocery vouchers make up 12% of the wish list.
“There is a growing awareness amongst South Africans about prioritising necessities over luxuries,” notes James Williams, Head of Marketing at Wonga. “The responses we received this year have confirmed the shift in consumer preferences and priorities.”
Less reliance on savings
Only 37% of people will use their savings to see themselves through the festive season. This has decreased from 40% in 2022.
Some 44% of respondents say they are expecting to receive a yearend bonus this year with over two thirds of them saying they will use their bonus to fund their additional festive expenses. They will outspend their ‘no bonus’ counterparts by an average R730 this 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.
Shopping trends
Online festive shopping, typically a steadfast trend, has plateaued at 26%.
Most people will shop in store and 10% will visit markets to buy gifts for their loved ones. Around 6% of respondents indicated that they would make their own gifts at home.
South Africans are feeling positive about 2024
“It is encouraging to see from our survey that well over half of the respondents are feeling optimistic and excited for the year ahead,” reports Williams. “Almost a third, however, are feeling anxious or scared about what 2024 may bring, which is perhaps due to a particularly challenging time for many households this past year.”
“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. 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.”
