Momentum’s latest Consumer Financial Vulnerability Index (CFVI) shows how South African consumers are struggling to afford their monthly food bills.
He said consumers are financial behavior have changed, mostly for the better, in response to higher financials the vulnerability they felt in the second quarter. “Increasing financial pressures tend to make more consumers cautious and usually accompanied by better financial behavior“, the financial services company said.
“Consumers made fewer feel-good and impulse purchases in the second quarter of 2022 compared to the first quarter of 2022, while find more time to familiarize themselves with information before making financial decisions. Impulsive purchases also fell from 59.6% to 46.9%,” the report said.
“High levels of consumer financial vulnerability are likely to persist in the short to medium term, given the growing number of structural imbalances, downside risks, political and social instability, rising poverty and inequality, and weaknesses in governance and public administration. .
“This will have a negative impact on the economy, employment and household incomes, which will have a negative impact on all aspects of consumer finances.”
The key risk factors that increased consumer financial vulnerability in the second quarter of 2022 are expected to continue to impact consumer finances in the third quarter of 2022, Momentum said. This includes fuel and food prices, load shedding, rising interest rates and low economic growth.
According to the latter Household Affordability Index According to Pietermaritzburg Economic Equity and Dignity (PMBEJD), food prices continued to rise mid-year.
The PMBEJD basket consists of 44 staple foods that are most commonly purchased by low-income families, which constitute the majority of households in the country.
PMBEZD reported that in June 2022, the price of a basket of basic goods now costs 4,688 rand. This is 78.92 rand more than a month earlier. On an annualized basis, the basket rose by 560.57 rand (+13.6%) from 4,128 rand in June 2021.
PMBEZH reported that vegetable oil (+69%), spinach (+39%) and baking flour (+24%) were among the three most expensive goods. Rising food prices posed the biggest risk to consumer finances in the first half of 2022, behind fuel prices, Momentum said.
Financial vulnerabilities are expected to persist into the third half of the year as a result of fuel prices, food prices and load shedding risks, Momentum said.
“With unexpected changes in food prices, it can be difficult to cook healthy meals without going over budget.”
Momentum has the following tips for budgeting and managing food spikes while grocery shopping:
- Prepare a shopping list: Before going shopping, consumers should make a list and stick to it. Make sure you limit your time in the store and buy only the essentials;
- Shop around: Search for the best prices on the products you need to buy by looking at weekly flyers and newspaper ads, and by visiting store websites or apps;
- Find out the prices of the products: Write down the regular prices of the products you buy often. This will help you figure out which stores have the best prices and when you’re getting a good deal on sale;
- Check the “expiry date”: Consumers should check the dates that are marked on food products to reduce early spoilage and loss of money. Frozen and canned foods are stored longer than fresh ones. Consider buying frozen or long-life foods in bulk;
- Plan: Plan your meals a week in advance, as this will save you from buying unnecessary things at the store;
- Use a basket instead of a trolley: Having less space will force you to limit your shopping to essentials;
- Compare the unit price of similar products: A unit price tells you how much something costs per “unit” or per 100 grams (g) or 100 milliliters (ml). This can help you compare whether it makes more sense to buy a larger or smaller item and is better value for money;
- Check out the season: If you’re buying fresh produce, make sure it’s in season, as it’s usually cheaper compared to off-season. Better yet, grow your own fruits and vegetables to save money on fresh produce;
- Bring a calculator or phone: Add up your grocery bill while shopping to help you stay within your budget;
- Use loyalty programs: Consumers can qualify for discounts, but only buy items that your family will use, and not just because it looks like a good deal, and;
- Use bank rewards programs: Understand how you can take advantage of bank rewards programs by optimizing shopping behavior for everyday transactions.
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