Less Ho-Ho-Ho, more No-No-No for SA consumers in festive season

Despite signs that the economy is starting to improve, South African consumers are facing a festive season containing more ‘No-No-No’ than “Ho-Ho-Ho’ this year, with a survey showing that 68% of participants will stay home and 71% will not be able to afford gifts for their loved ones.

Debt Rescue’s Festive Season Survey shows that:

• a massive 68% of participants have no plans to travel and 62% attribute their decision to the high cost of fuel cost. It is evident that this will be a stay-cation festive season for most South Africans
• 71% of people polled say they may have to give up on any gifting purchases at all
• 57% of participants say high inflation is definitely a primary driver behind the changes in their festive spending behaviour, with others citing the still-high repo rate
• Significantly, 66% say they will actively look for and buy low-priced items, from gifts and technology to essential food and toiletry items and even clothing, while 56% will simply cut down on purchases across the board
• In terms of financing festive expenses, a significant percentage (51%) prefer using cash, suggesting a cautious approach to avoid running up more debt.

The latest Debt Rescue survey paints a disturbing picture of a nation in serious financial distress with household budgets offering little in the way of festive cheer and even less relief from the tough year.

“It is clear from our festive season survey results that millions of hard-working citizens who were looking forward to their annual trip to visit friends and family during the end-of-year holidays will no longer be able to afford this once-a-year luxury.

 “This points to the deep financial waters average South African find themselves in as we head into 2025,” Neil Roets, CEO of Debt Rescue, says.

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Consumers battle even in festive season

The survey is an in-depth analysis of the current consumer spending patterns, focusing on the festive season’s expenditure in the face of the nation’s economic hardships. Survey results reveal that embattled citizens have far less spending money available this festive season and that the tradition of gifting is set to take a serious knock.

“This is possibly the most distressing survey outcome of all. It came through strongly that people are planning to spend far less on Christmas gifts this December, with 71% saying they may have to give up on any gifting purchases at all – a tradition which lies at the heart of South Africa’s season of goodwill.

“When the majority of the nation is unable to afford exchanging gifts during this season of giving, we need to sit up and take notice,” he warns.

Roets says the fact that participants said they will rather use cash if they do buy anything is particularly relevant in a high interest rate environment where debt becomes more expensive. “This behaviour reflects a shift to heightened financial caution.”

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For millions, a good plate of food will be all for festive season

He says it is important to note that for millions of South Africans a full plate of wholesome food is all they can look forward to over this season of goodwill – and only on special holidays like Christmas, Hanukkah and New Year.

“This will indeed even be out of reach for at least half of households across the country, as the price of the household food basket continues to skyrocket.”

According to the latest Household Affordability Index, the price of the average household food basket for low-income consumers increased by 0.9%, costing R5 361.04 in November. Mervyn Abrahams, programme coordinator for the Household Affordability Index, says the general trend of the household food basket remains high.

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Food also still very expensive

“Many households in South Africa remain unable to afford such a food basket and with Christmas shopping and back-to-school costs looming in January, families will be forced to dig deep into their wallets while their food baskets get smaller. This makes it increasingly challenging to maintain traditional festive meals.”

With many South Africans now a mere few days away from their year-end holidays, they will be looking for ways to celebrate with friends and family in some way, shape or form and Roets says the reality is that they will be stretching their credit facilities to the limit and entering ‘Januworry’ with an even heavier financial burden.

“The cold, hard truth is that many purchases will be made by swiping credit and store cards and this excessive debt will have to be repaid, perpetuating the cycle of debt for households at a time when their financial predicament is already dire.”