Gone are the days of extravagant holidays and heavy drinking sessions as more South Africans are expected to scale back on fun in favour of buying food, according to the latest Deloitte Year-End Holiday Survey
Tough economic conditions are prompting consumers to be more pragmatic in their spending habits, with more households expected to allocate around 44% of their festive season budgets on food, up from a 36% allocation last year.
And while consumers are willing to scale back on holiday fun to save a buck, they’re not willing to curb spending on Christmas gifts, which survey respondents say will account for 43% of their festive season budget.
“Consumers are showing signs of conservatism as general day-to-day living expenses continue to rise, while consumers try to stretch their budgets as far as possible,” said Rodger George, Deloitte African consumer business leader.
Consumers are expected to spend around 13% of their budget on socialising, down from 23% last year.
The South African consumer spending trend largely mirrors consumer spending in Europe, as European consumers are expected to spend 40% of their festive season budget on food, 39% on gifts, 12% on travelling and 9% of their budget has been allocated to socialising.
Neil Roets, CEO of debt management firm Debt Rescue finds it “deeply disturbing” that consumers are prepared to spend 43% of their Christmas expenditure on gifts and warns consumers are at risk of suffering from a seriously painful debt hangover in the New Year.
“This is bad news for the majority of consumers who already owe more than 75% of their monthly pay checks to creditors. Overspending on items like toys, liquor and unnecessary luxuries is simply going to plunge them deeper into debt,” he said.
The survey also revealed that SA men are significantly more positive about economic prospects next year with 33% of men holding a positive view compared with just 19% of women optimistic about the country’s economic prospects. South Africans have also ditched chocolate for cash as the most preferred gift they’d like to receive.
Meanwhile, the 2014 Acentric Christmas Shopping Intentions Survey (conducted among middle- and upper-income South Africans) found that consumers are planning to spend 34% more on their Christmas shopping than they did last year, with food, toys and mainstream clothing and accessories topping consumers’ shopping lists.