The PwC SA report showed that 75% of local consumers rank inflation as the number one risk they believed could impact the country over the next year, followed by macro-economic volatility (55%), and social inequality (40%). Photo: BONGANI MBATHA/Independent Newspapers
PwC has warned that more than the majority of South African consumers are expecting the biggest spending hike to be on groceries in the next six months, as a result of elevated food inflation.
According to the PwC South Africa’s Voice of the Consumer Survey 2024 released yesterday, more than three quarters (77%) of 1 009 surveyed South Africans are feeling the pinch of high food prices.
At the same time, the report showed that 75% of local consumers ranked inflation as the number one risk they believed could impact the country over the next year, followed by macro-economic volatility (55%) and social inequality (40%).
Anton Hugo, PwC Africa retail industry leader, said while consumers largely accepted the price increases of the Covid-19-era, they were showing little tolerance for continued rises, especially as they turned their attention to mounting non-discretionary spending.
“This has resulted in consumers searching for better value for their money, with 44% saying they would consider switching from their preferred brands to more affordable options while only 7% said they would buy a luxury item with their leftover income after paying for bills and essentials,” Hugo said.
Food inflation slowed to 4.3% in May, down from 4.4% in April primarily driven by price moderations in bread and cereals, milk, eggs and cheese, but other products in the food basket experienced a milder increase.
According to PwC, two-thirds of local consumers (67%) have intentions to boost their intake of fresh fruits and vegetables over the next six months, while a smaller but important group (26%) planned to reduce their red meat consumption.
Lullu Krugel, PwC Africa sustainability leader, said despite these health-oriented preferences, only 14% of consumers consider the environmental implications of their food choices.
“This disconnect presents a significant opportunity for food producers, retailers and wholesalers to bridge the gap between consumer intent and sustainable practice,” Krugel said.
“Consumers indicated a growing interest in plant-based diets, which hints at a rising awareness of the environmental burdens posed by traditional meat production –particularly beef – which was a known contributor to greenhouse gas emissions.”
She also said that explicitly addressing these consumer concerns may help companies integrate plant-based options into mainstream shopping habits, while being mindful that the main motivations behind these shifts were consumers’ considerations of general health (66%), and product cost (58%) when they make food and dietary choices.
BUSINESS REPORT