Five years ago, the pandemic flipped the world on its head and with it, our financial systems, habits, and priorities. Lockdowns, global supply disruptions, and shifting interest rates reshaped economies everywhere. For South Africans, the way we spend has changed profoundly.

Since March 2020, when SA entered lockdown, we’ve seen some fascinating transformations in how money moves through households. And with that change comes opportunity, new behaviours, emerging trends, and the chance to understand what’s really driving consumer decisions today.

So, what does this new landscape look like? Let’s unpack..

The Essential Spend

Groceries, Medical expenses, house and rent expenses, home and utility, as well as transport and fuel, make up the 5 categories we analysed as essential spending.

The Reign of Groceries

In 2019, rent was the biggest essential expense for South African households. But in the years that followed, groceries surged ahead to claim the top spot. Between 2019 and 2024, average annual grocery spend jumped by 69%, far outpacing rent, which rose by just 21%.

This shift closely mirrors inflation trends. In 2020, CPI hit a low of 3.3%, but by 2022 it peaked at 6.9%, driven largely by rising costs in food and non-alcoholic beverages, along with housing and utilities (StatsSA). Groceries, once a stable category, became a standout driver of essential expenses, and this proves that when it comes to essentials, where one lives is the easiest place to cut expenses when prices go up fast.

Interestingly, by 2024, as inflation eased to 4.4%, grocery spend finally dipped slightly—a small but notable reversal in the trend.

Grocery Spend Hits Harder at the Bottom

While high-income households still spend the most on groceries in absolute terms, with a 28% increase from 2019 to 2024, it’s low-income households that have felt the sharpest impact.

For many South Africans in the lower income bracket, groceries have become significantly more expensive, with average annual spend soaring by 88% over five years. Medium-income households also saw a steep rise at 48%.

Meanwhile, rent continues to dominate essential expenses for both medium- and low-income groups, highlighting how rising food costs are squeezing budgets already stretched by housing.

The Non-Essentials

Non-essential spending habits vary across income groups, but one trend cuts through them all: a sharp rise in spending on loans and insurance.

Across the board, households are pulling back on home and garden upgrades – and saving less than they used to. The post-COVID financial reshuffle is showing up clearly here, with more money going toward managing risk and debt, and less toward future-focused or lifestyle spending.

High-Income Habits Are Shifting

Before 2023, high-income households were big spenders on home and garden improvements. But priorities have shifted. Since the pandemic’s onset in 2020, spending has leaned heavily toward loans and insurance, by 2024, these had become the top two non-essential expenses in this group.

The post-COVID travel boom also lost steam. Holidays and travel, once the second-biggest category, dropped to fourth. Eating out and takeaways now sit in fifth, with both seeing declines from 2023 to 2024.

There are a few standout exceptions. Coffee, pet care, and especially tech and appliances have held their ground – or even surged. Tech spend alone climbed by a third in just one year, signalling an  ongoing appetite for connected, convenience-driven lifestyles.

Middle-Income Households Reprioritise

For the middle-income group, loans and insurance now dominate non-essential spending, overtaking savings, home improvements, and travel, which led the pack in 2019.

Eating out and entertainment have also taken a hit since 2023. And while high-income earners kept spending on tech, middle-income households hit pause after a post-COVID splurge in 2022. The result? A clear shift from aspirational to practical spending, as financial caution takes centre stage.

Low-Income Households Feel the Pinch, Shift Priorities

After the pandemic, low-income households jumped at the chance to travel, but by 2024, holiday spending had tapered off. Home and garden expenses, once a key category in 2019, dropped to fifth place.

What’s taken over? Loans now dominate spending, followed closely by insurance. These two categories have surged, reflecting a broader move toward financial protection and debt servicing. Meanwhile, alcohol spending dipped in 2024, while coffee spending continued to climb.

Tech and appliance spending has remained mostly flat since its peak during the 2020 lockdowns. However, there’s been a noticeable uptick in software and services, possibly mobile data and digital tools, as connectivity becomes even more essential. And in a heartening twist, pet care spending is up, too, showing that even in tighter times, people are still making space for the things they love.

Trends Across Income Groups

Tech spend stumbles, recovers

Tech and appliance spend has been a strong performer over the past five years, until 2023, when it took a noticeable dip. But the pause didn’t last long. By 2024, spending had bounced back, reaffirming the category’s role as a priority across all income brackets.

While the chart tells the full story, the trend is clear: when it comes to tech, South Africans may slow down, but they rarely stop.

Alcohol Slips as Tastes Shift

Alcohol spending enjoyed a brief post-COVID-19 rebound, rising 20% in 2021, but that momentum didn’t last. Since 2022, it’s been on a steady decline, with a 5% drop across all income groups in 2024 alone.

This isn’t just a blip, it’s a signal. Consumer appetite for alcohol appears to be shifting, and big players like Heineken are already hedging bets by pouring investment into non-alcoholic alternatives. Globally, the non-alcoholic drinks market is valued at $1.3 trillion and is set to more than double in the next decade.

Driving this trend? A mix of health awareness and cultural shifts, especially among Gen Z, who are far more likely to go teetotal than previous generations. For retailers, this doesn’t spell disaster. Consumers aren’t quitting beverages; they’re just choosing differently. But the long-term impact on sin tax revenues and the viability of alcohol-only retailers could be worth watching closely.

Coffee on the Climb

While alcohol spending slips, coffee continues to rise though at a slightly slower pace. Since 2020, coffee spending has surged by an incredible 168%, peaking in 2023 before easing slightly in 2024.

What’s striking is the narrowing gap between coffee and alcohol. In 2023, alcohol spending was triple that of coffee. By 2024, it was just double. The shift suggests more than just changing preferences — it signals a generational reset.

Gen Z is leading the charge. Not only are they drinking less alcohol, they’re picking up coffee younger than any previous generation, often by age 15, compared to Millennials, who typically started in their late teens. This early adoption hints at a long runway of growth still to come

Insurance and Loans Surge, Then Settle

Right after COVID hit, spending on insurance spiked across all income groups, an immediate response to uncertainty. That upward trend has continued year after year, but like many other categories, growth is beginning to slow as we move into 2024.

It’s a classic post-crisis pattern: a rush to safeguard against risk, followed by a gradual normalisation. Still, the elevated baseline suggests insurance has cemented itself as a priority in the new consumer landscape.

The Overall Landscape Shifts

Of all the spending categories reshaped by the post-COVID world, loans and insurance saw the biggest gains. By 2024, average annual spend on loans was up 68% compared to 2019, while insurance climbed 60%.

Close behind were more lifestyle-driven categories, eating out (+54%) and clothing (+56%), reflecting a cautious return to discretionary spending. And while personal care started from a smaller base, it nearly doubled, rising by 92%.

The message is clear: South Africans are balancing risk, debt, and a desire for normalcy, reshaping household priorities in the process.

To Conclude

Essentials spending remains dominant, but there is growing sensitivity to price. Consumers, particularly in low-income households, are becoming far more selective about where and how they spend on groceries. Inflation has placed sustained pressure on household budgets, and although essential spending holds steady, the way consumers approach these purchases is changing. Value, promotions, and perceived necessity are more important drivers than before.

The rise in loans and insurance spending points to a consumer mindset shaped by uncertainty. Across income groups, people are prioritising financial protection and stability over discretionary spending. This shift suggests a longer-term caution in household financial behaviour, where managing risk and covering obligations take precedence over saving or lifestyle upgrades.

Coffee continues to grow as a daily ritual, particularly among younger generations. What was once considered an occasional indulgence has become a regular, habitual purchase. This points to a broader cultural change where coffee is not only replacing other discretionary treats but becoming an identity marker, much like technology or fashion once were for previous generations.

Alcohol spending is on a steady decline, and the trend appears structural rather than temporary. Health consciousness, changing social norms, and the rise of non-alcoholic alternatives are all contributing to a gradual shift away from traditional alcohol consumption. This shift is especially visible among Gen Z, where sober curiosity and moderation are far more common than in older generations.

Tech spending, after a brief slowdown in 2023, recovered strongly in 2024. This rebound shows that digital connectivity, convenience, and access to technology remain high priorities, even when budgets tighten. Technology is no longer viewed as a luxury — it is woven into everyday life, across work, education, entertainment, and social connection.

Rent costs have grown modestly compared to other essentials over the past five years. However, this may be a temporary pause rather than a long-term trend. As interest rates ease and the economy continues to stabilise, housing costs, particularly rent in urban centres, could rise again. This potential rebound would add new pressure on household budgets and shift spending dynamics once more.

These shifts in the consumer landscape point to a South African market that is evolving, not shrinking. As habits change and new priorities emerge, there are more opportunities than ever to meet consumers where they are and build lasting relationships. Understanding these patterns is the first step toward unlocking new growth.

If you’d like to explore any of these trends in more detail or run a deep dive into a specific category, the team at Reveal is ready to help. Reach out to us by replying to this email — we’d love to work with you!

Until next time,

Reveal

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