How South Africa’s economy is changing the way we shop

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Bargain-seeking behaviour among South African shoppers is high, according to the latest Nielsen study of South African Shopper Trends 2015/2016.

The study is representative of income, age and gender across South Africa. It is drawn from a national sample of 2 524 main grocery buyers and influencers, and is based on in-depth, face to face interviews.

Among the main shoppers interviewed, 68% were women and 32% men and of the influencers, 64% were men and 36% women.

In terms of their sensitivity to promotions, the highest number (36%) said they seldom change stores but actively search for promotions when shopping, while the second highest number (22%) regularly buy different brands because of promotions.

“Consumers have always been price conscious but have now become even more so within their choice of stores,” said Nielsen Consumer Insights director Esti Prinsloo. “Consumers actively search across media platforms like broadsheets and investigate retailer websites for promotions.”

Price awareness remains high

Against the backdrop of extremely tight economic conditions, the study found that consumers are understandably exhibiting even more price-conscious behaviour and are likely to notice any price fluctuations among categories they purchase regularly.

The majority (48%) of shoppers said they know the prices of most of the items they purchase and always notice price changes.

In addition, 88% of consumers feel food prices in South Africa are increasing, 11% feel they’re stable and only 1% believe prices are dropping.

In terms of consumer response to rising food prices, the majority of respondents (54%) said they now buy only essentials and have cut down on luxuries, 36% said they buy in bulk to get lower prices and 30% said they buy less in total.

The same figure said they have switched to cheaper brands, 29% said they buy products on discounted price and 8% seems to be living comfortably as they do not see rising prices affecting them.

Overall, spend on food, groceries, household and personal care items has increased by 6% in the last year from R1 610 in 2014 to R1 702 in 2015. With specific reference to their share of monthly spend on fresh food ie meat, fish and vegetables, this figure stayed roughly the same – R639 in 2014 and R640 in 2015. However, this is set to change in 2016 as the effect of the drought impacts the availability of fresh food products.

The study also showed that grocery purchases are planned activities, with the highest number of respondents (81%) saying they usually plan what they want to buy before they shop for groceries, while 76% often purchase items  they notice are on sale or on promotion while in-store.

Seventy-three percent say they buy named brands because they trust them, and 72% have regular shopping routines and buy most products out of habit. Among consumers, 71% say they have a strict household budget for household groceries and only buy the grocery items they need.

Back to basics

The results showed that despite supermarkets showing a 9% decline from 92% in 2014 to 83% in 2015,; they remain the most popular retail channel in South Africa. Spaza shops maintained their usage at 45% in 2015.

Supermarkets have seen a decrease in shopper frequency levels from 4.5 times per month in 2014 to 4.3 times in 2015. Spazas, however, have risen from 18.2 times per month to 18.4 as have butchers (2.7 to 3.2) and vegetable vendors 4.3 to 5.3.

“The increased use of more locally-based stores points to a trend towards the ‘neighbourgoods’ type approach to retail connections,” said Prinsloo.

“It may well be that this is related to the ability of these outlets to offer a far more flexible shopper experience and therefore better meet the needs of shoppers, in light of the challenge of ever tightening wallets.”

In contrast, hypermarkets declined from 2.8 to 2.0 per month.

“These outlets have always been more destination orientated and for shoppers at these stores, promotions and price are big drivers. Significant promotions are therefore required to entice consumers to travel to purchase in bulk quantities,” Prinsloo said.

Looking at the digital retail realm

The study revealed that 7% of South African shoppers have visited a retailer website in the last month, the same figure as in 2014.

The interesting finding is that consumers mainly use websites for information rather than shopping. In terms of their purpose for visiting a retailers’ website, 63% of respondents said they check out special offers, 31% look up product information, 29% look up recipes, tips and ideas, 20% respond to a retailer event or competition and 19% buy groceries online.

In addition, 18% read product reviews, 16% to sign up for a loyalty card and 10% check on their loyalty status.

The study shows that in the current economic climate, consumers are enticed by price and promotion and are willing to go the extra mile to get the better deal.

However, it noted that quality remains a significant factor and brands that continue to delight their customers will reap the benefits, meaning the value proposition will always remain more than just the actual price.

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