With South Africa entering into its third week of the nationwide Covid-19 lockdown, consumer spending has reflected several about-turns.
Our data, comprising of point of sale (POS) and transactions from ATM withdrawals – both recorded by BankservAfrica – tracks South African interbank transactions from the beginning of March until 5 April 2020.
“This provides economic insights into the consumer impact of coronavirus and is based on what our data is telling us,” says Shergeran Naidoo, head of stakeholder engagements at BankservAfrica.
Transaction data showed consumer spending was surprisingly strong before any coronavirus case was ever reported in South Africa at 20% above last year’s rate. At times, spending was speeding up but at others, levelling out as the growth rate slowed down.
On 5 March 2020, the first coronavirus case was announced. The spending slowdown became more pronounced as the volume of consumer transactions eased.
On 15 March 2020, President Cyril Ramaphosa announced a national state of disaster beginning 18 March with school closures, a partial travel ban and discouraged use of non-essential travel. Gatherings of more than 100 people were prohibited.
It seems this message reached consumers and spending picked up again, particularly among those paid in the middle of the month who were able to head to the shops.
By the following week, spending declined from the levels of last year. Just ahead of the announcement that the 21-day lockdown would commence on 27 March 2020, spending had already fallen back 20% on a year ago.
With the biggest salary payment day the 25th of every month, people raced to the shops to stock up the lockdown. On 25 March 2020, consumer transaction volumes were 158% of normal spend this time last year. The bar was set even higher the next day, 26 March 2020, at 172% of normal spend for a month-end payday.
On the days following the nationwide lockdown, consumer spending fell to 28% of normal levels.
But on the social grant payment day on 30 March 2020, consumer behaviour returned to near-normal levels for that time of the month with transactions reaching 98% of typical spend.
After two more days of above 60% of typical spend, it fell back to 45%, as one would expect from the lockdown. This could have also been caused by the restricted movement, food items being limited to essentials only and some South African households coming under financial strain.