South Africans are trying to save money on food - by shopping less and stocking up on specials

Business Insider SA
Employees pack bags of shopping at the check out a
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  • South Africans have reduced their number of shopping trips a month, and the average amount spent fell from R210 in July 2018 to R194 in the first quarter of this year, data from the research firm Nielsen shows.
  • Some 70% of consumers will buy a bigger pack if it's on promotion, and offers value.
  • Tiger Brands, which released its half-year results on Wednesday, quoted the research to show that consumers are increasingly price sensitive.
  • For more, go to Business Insider SA.

Cash-strapped South Africans are limiting their trips to the store and spending less per excursion, new research shows.

South Africa’s consumers are increasingly price sensitive, Tiger Brands CEO Lawrence MacDougall said in the company’s half-year results presentation, describing a “low inflation and low volume” environment.

The company presented data from research firm Nielsen for the first quarter of 2019, which showed:

  • The number of shopping trips per month dropped to 60 – almost half a percentage point less than in July last year.
  • The average amount spent during a trip fell from R210 in July 2018 to R194.
  • The biggest spending declines were seen at the large retailers, compared to independent shops and wholesalers.
  • Almost two-thirds of South African shoppers are now "actively” comparing prices across brands.
  • A quarter of South Africans stock up on premium brands on promotion.
  • Some 70% trade up to a bigger pack if it's on promotion, and offers value.
  • Some 40% look for specials in newspapers.
  • Over recent months, consumers have spent more on bread, toilet paper, soya-based substitutes, canned pilchards, soap as well as personal care and baby products.
  • They spent less on maize meal, fresh and frozen chicken, chilled processed meats, flour and cooking oil.

See also: After a long fall, bread is quickly getting pricier – while pap prices are all over the show

Tiger Brands reported strong revenue growth of 8% in its consumer food brands business, which includes some of the biggest names in South Africa:

Brand share of sales volume, in the six months to
Brand share of sales volume, in the six months to March 2019. Source: Nielsen

It saw strong volume growth in beverages, home care, baby care and groceries, but sales of grain products fell. Prices for sorghum-based products, maize, pasta and baby care products were lower in the past six months.

But overall, Tiger Brands saw a 2% decline in its revenue to R15.4 billion, with earnings down 12% due to lower exports, and the continued costs of a deadly outbreak of listeriosis, which has resulted in a class action suit filed by victims.

Following its results announcement on Wednesday, its share price was up 1% to R232.50 - still down more than 50% from where it was before listeriosis was traced to one of its Enterprise factories. 

Tiger Brands share price. Source: Sharenet
Tiger Brands share price. Source: Sharenet

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