The holiday outlook in South Africa

Based on insights from NielsenIQ’s Consumer Insights global study “Unwrapping the Holiday Outlook” it’s clear that this time of year continues to hold high emotional value for consumers with the bulk remaining Christmas “enthusiasts” with no plans to change the way they celebrate. 

NielsenIQ Managing Director Ged Nooy comments; “In terms of their intentions, most consumers do not want to give up their usual traditions and are determined to spoil themselves and their loved ones. However, this year the dilemma is that despite their best intentions, consumers are also grappling with making the most of their tight budgets and have adopted tactics such as shopping early and taking advantage of special offers.” 

This early approach is borne out by the fact that last year, a quarter of all rands spent were on promotions during the peak festive season shopping week ending 26 December. Significantly, this is 3% points lower than the average for the year, and a whopping half of that seen on Black Friday week in the previous month of November 2021. 

This suggests that retailers and manufacturers pulled back significantly due to their investments in Black Friday. 

State of the Retail Nation

Another useful gauge for current festive season sentiment is the latest NielsenIQ State of the Retail Nation review which reflects data measured over the four weeks to the end of October 2022. It shows that the total FMCG basket now measures R567-Billion (12MM TY) representing 13% annual growth. 

In terms of the key consumer trends that emerged during this period, NielsenIQ analysis found that certain long forgotten consumer behaviors have started to resume as South Africans finally emerged from the specter of COVID-19. 

These include: 

• Shopping trip frequency turns a corner: The trend of fewer shopping trips has yet to stabilize although the rate of decline has slowed. In the most recent months, some consumers have seen a resurgence in monthly shopping trips. 
• Bigger baskets: Shoppers have increased the number of products they purchase per shopping trip as the interval between trips has become longer. In certain instances, consumers have upsized (long-term economy), downsized or exited a product category completely (budget). 
• Feet through the door recovers in the short term: Consumers have resumed their pre-Covid behavior of shopping across retailers. 
• Ease of use: The rise of convenience continues but not only in the form of rapid delivery and quick e-commerce options. Locality is increasingly important with independent retail (non-branded superettes, spazas etc.) that have a large footprint and a decentralized offering, seeing a significant increase in key performance indicators versus modern trade channels. 

In addition to these re-emerging trends, certain lockdown induced behaviors continue to grow. For example: 

• Homebound economy: In-home consumption continues to show value growth increasingly driven organically versus purely by price. 
• Increased category performance: As in-home consumption solidifies its position; consumers are shopping more categories to fit their specific needs. 
• Inflation nation: The ongoing effects of inflation are clearly indicated by an increase in the value per buyer in recent months outpacing the number of units they purchase. In simple terms, consumers are paying more and getting less for that spend. 

* DATA SOURCE: NielsenIQ’s Market Track, the largest retail (grocery) data source in the country and the only currency used by all South Africa’s major retailers. This benchmark data comprises more than 10 000 branded retail outlets (e.g. supermarkets and garage forecourts) and more than 143 000 independent stores (e.g. Spazas & Taverns) across South Africa’s nine provinces and measures more than 80% of all retail grocery transactions. 

**PLEASE NOTE that as an unbiased retail data and analysis provider NielsenIQ is subject to contractual terms which prevent it from releasing specific manufacturer and retailer data points. We also do not provide comment on specific retailer market share or performance and therefore kindly request that any content of this nature is attributed to your source of reference.