An online survey shows that many consumers are now mainly buying necessities and spending less on luxuries.
The survey was conducted by customer experience consultancy firm, Consulta.
Many consumers are battling financially due to job losses and a reduction in salaries amid the COVID-19 pandemic.
At the same time, the National Credit Regulator (NCR) has called on consumers to prioritise their spending.
In this video below, cash-strapped consumers say they are mostly buying necessities:
It has urged those who are battling to repay their debt to consider relief measures on offer.
According to the survey, about 60% of its 850 respondents intend to spend less on food that is not cooked at home.
While 51% of those surveyed say they are going to spend less money on clothing and 34% intend to spend less money on alcohol.
Head of Customer Insights, Consulta Ineke Prinsloo, says, “From the research we conducted, it was clear that there are challenges and respondents are cutting back on spending.”
Consumers are expecting to spend 20% less on their banking fees and loan repayments.
But, many of the respondents do not expect significant savings on their short-term insurance, life insurance and medical aid contributions.
Some of the consumers say they’re not benefitting from the interest rate cuts and the payment holidays offered by the banks.
Ineke Prinsloo says, “The question was actually asked. If you had to look for savings in April, they were positive about the payment holidays, but they said they were not getting the benefit of the interest rate cut.”
On the other hand, the National Credit Regulator says many cash-strapped consumers have resorted to borrowing due to lower salaries, one of the effects of the impact of COVID-19.
The regulator has called on consumers to spend wisely and to mostly buy necessities.
NCR Acting Manager Kedilatile Legodi says, ”We have seen how many consumers have resorted to panic buying using credit.”
The NCR has also called on consumers who are battling to repay their debt to consider claiming from their credit life insurance.
Credit life insurance covers outstanding debt in the event of death, retrenchment, unemployment and disability.
Consumers are also urged to consider debt counselling, which will protect them against repossessions or legal action by credit providers.
Furthermore, consumers have the option to voluntarily surrender or return goods to credit providers when they can no longer afford to maintain the repayments.
The NCR expects that consumers will continue to be under pressure amid continued job losses due to the impact of COVID-19.
And it has urged those who are fortunate enough to have a job to be mindful of their spending and pay off their debt.