South Africans are hooked on promotions

South African consumers are increasingly seeking out promotions due to rising pressure on household budgets, making them more sensitive to prices and special offers. NielsenIQ's data shows that a growing share of fast-moving consumer goods (FMCG) sales now occur under promotional conditions, with consumers becoming more responsive to price hikes and promotional deals compared to last year.

Despite the increased spending, shoppers are becoming more selective about where their money goes. Zak Haeri, the Managing Director for NIQ South Africa, noted that retailers face a balancing act as consumers become more accustomed to promotions. Haeri emphasized that manufacturers and retailers need to use promotions strategically without conditioning consumers to wait for discounts before making purchases.

The desire for value is also evident in the rapid growth of loyalty programs in South Africa. According to a study by Truth & BrandMapp, 82% of economically active South Africans used loyalty programs in 2024, with the average consumer belonging to 10.3 programs, up from 3.6 a decade earlier. Cashback has emerged as the most popular benefit across income groups, genders, and generations, with Clicks ClubCard leading the loyalty program landscape.

Cashback is being used for necessities, with Clicks reporting high redemption rates for items like soap and toilet paper. Major loyalty programmes extend beyond supermarkets and pharmacies, with brands like KFC entering the fray with unique reward offerings. KFC's new rewards program allows members to redeem points for experiences such as music festival tickets, gaming gear, and VIP events, reflecting a shift towards rewarding consumers based on their broader interests.

This trend underscores the growing battle in the consumer market to offer rewards that resonate with shoppers' lifestyles.