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South Africans went back to budget over the festive season

Consumers seemed to have been rather conservative over the festive period. Consumers seemed to have been rather conservative over the festive period.

It seems as though South Africans had to sit and watch the world go by over the December festive season, as consumers spent a meagre 1.4% more on average per transaction at the tills year-on-year.

 According to the latest figures released by BankservAfrica, it seems as though South Africans had to sit and watch the world go by over the December festive season, as consumers spent a meagre 1.4% more on average per transaction at the tills year-on-year.

BankservAfrica is South Africa's only local clearing house which facilitates retail electronic transactions between banks. The company also publishes two economic indices – the BankservAfrica Economic Transaction Index (BETI) and the BankservAfrica Disposable Salary Index (BDSI).

Brad Gillis, CEO for regulated products at BankservAfrica, says consumers seemed to have been rather conservative over the festive period. He explains the average card transaction via the BankservAfrica payment system had an increase of only 1.4% in December 2013 compared to a year ago. This is lower than the inflation rate of about 5.5% over the same period.

"Some spending on hotels and car rentals shows a different picture, which may indicate that South Africans that would normally travel abroad are instead choosing to stay in South Africa for their holidays, especially given the weaker rand."

The average ATM withdrawal increased by only 1.3% compared to December 2012, as did credit card transactions. On average, debit card transactions only increased by 1%. Average transaction values in real time clearing via electronic transfers increased by 4.9% and surprisingly the average cheque transaction values also increased by 7.4% despite fewer cheques being used.

In stark contrast to other consumer spending, electricity prices increased by 8% year on year and water bill increases were generally in double digits. Interestingly, utility bills increased by 3.5%, in one month alone, from November to December 2013.

Mike Schüssler, chief economist at economists.co.za says, “The BankservAfrica data also shows that the average trolley in the supermarket cost just over R400 in December, which was up by only 1.6% on 2012.

"This clearly indicates a cutting back by consumers, as this is about 4% below the inflation rate. Many department stores had a hard time with clothing, books and music sales which all grew average transaction values below the inflation rate. Even South African satellite TV services had an average transaction value increase below inflation, reflecting the fact that consumers still want entertainment but are getting jittery about paying for it."

In total the average spending on recreation fell by about 21%. Newspaper subscriptions saw a drop of 24% in average transaction spend, showing how difficult life in the media industry currently is.

"Worryingly, it seems that South Africans are paying less to education service providers on an average transaction basis with a drop in average transaction values of just over 3%. Correspondence schools, which often provide tertiary education for people who do not get accepted into fulltime courses, recorded a drop of over 26%," says Schüssler.

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