South Africans are forecasted to each spend an average of R6,326 over and above their usual monthly expenses during the festive season, according to short-term lender Wonga's annual Summer Spending survey. Based on Statistics SA's mid-year population size estimates, this means that SA consumers are expected to collectively pump R252bn into the local economy.
As part of the Wonga survey conducted in November, 6,400 South Africans shared their plans for the festive season, where they plan to be, what gifts they would like and how much they intend on spending. They also gave an indication of how they were feeling about 2022.
According to the results, the average spend per person over this period is forecasted to be up 12%, up from an average of R5,673 in 2020. This follows a decrease of 15% between 2019 and 2020, meaning that this year spending is predicted to be back up at pre-Covid levels.
“Our survey revealed that 37% of people think they’ll spend more this festive season than they did in 2020, despite the ongoing financial impact that the Covid-19 pandemic has had. The increase in predicted spend overall is significant and the figures this year are encouraging, reflecting the upward trajectory of the economy,” reveals Bryan Smith, content manager at Wonga.
The research also showed that 41% of South Africans reported that they are better off than they were this time last year, with only 23% saying that they were in the same position financially.
“The survey was conducted prior to 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. We are hoping that the economy proves to be resilient in the face of this new development and that South Africans can enjoy a safe and peaceful festive season,” he continues.
Third of festive budgets spent on food and drink
The research revealed that food and drink will take up 31% of most budgets, at an average cost of R1,984 per person.
This is followed by gifts, which account for approximately 18% of festive budgets, with South Africans spending around R1,188 each to spoil their loved ones.
Due to the financial impact of the pandemic, however, 43% of South Africans will spend less over the summer holidays than last year, and some (19%) plan on spending the same.
To cope with the extra expenditure over the December period, the majority of people surveyed (43%) plan to draw from their end-of year-bonuses, use their savings (37%) or rely on stokvels (28%). Some (25%) plan on taking out a short-term loan, which is up from 22% in 2020, with 8% of respondents spending money on their credit cards to get them through the festive season.
Travel plans: almost half of South Africans plan to stay at home
The ongoing pandemic and affordability has influenced people’s travel plans, with 48% of people choosing to stay at home over the festive season. According to the research, 22% of South Africans say this is due to having to work over the holidays.
“We have seen a slight decrease in predicted spend on travel overall, with only 2% planning to travel overseas this year, compared to 0,58% in 2020 and 5% in 2019,” Smith continues.
Of those leaving home for the holidays, 22% 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%) will be travelling by car, which is similar to previous years, with just 17% by bus and 11% by plane. Most people (61%) will be travelling to visit family or friends, with some visiting places because of their natural beauty (12%) or because they offer peace and quiet (18%).
Festive gifting: online shopping continues to grow
The majority of South Africans plan on buying gifts this festive season. Seventy-seven percent plan on spoiling their family, which is up from 75% in 2020 but down from 83% in 2019. Interestingly, 21% also plan on buying themselves a gift this Christmas. At the top of 46% of people’s Christmas lists are money (the same as last year) and gift vouchers (19%).
Much the same as in 2020, 21% of respondents plan to do all their shopping online – up from 13% in 2019, and 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.
There is a 2% increase in South Africans preferring to shop in-store (70%) this year, when compared to 2020. This has however declined by five percentage points since 2019 (75%) and is down 11% when compared to 2018 (81%). The remainder of respondents intend to make their own gifts, or to purchase gifts from markets.
Festive celebrations: South Africans more optimistic for 2022
South Africans’ favourite way to celebrate the festive season is by getting together with loved ones (71%), with 29% getting together to exchange gifts. With many people staying at home this summer, it stands to reason that the most popular way for respondents (46%) to celebrate is by having a braai.
The majority of South Africans will be staying at home this year (44%), with a number (19%) of people choosing to spend their time on the beach and 16% planning to eat out at a restaurant. Some (22%) will attend religious services.
“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,” says 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.”