Consumer Research Africa

SA Consumer Outlook – A Dwindling Middle Class

Using our consumer wallet model we assess consumers’ funds available for retail and discretionary spend may have increased in 2019, and we forecast an increase in funds available for spending in 2020. Our analysis of SARS data shows that weak economic growth resulted in lower corporate tax and VAT contributions, with a greater burden falling on the individual taxpayer base. We consider the impact increased emigration may have on tax revenue. Our analysis points to a shrinking middle class which is not being replenished by younger, emerging middle-class taxpayers. We quantify the impact of load shedding on retail sales growth and determine which types of retailers are most impacted. The results suggest that load shedding may not result in lost sales, as customers sometimes defer purchases to a later date. This is encouraging as SA is facing growing uncertainty regarding reliable supply of electricity