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Follow our blogs to gain insights into contemporary market research and business intelligence trends relevant to consumers and business. The blogs serves as a platform for knowledge generation and sharing for those interested in household and personal wealth, demography and population, economic and business, consumer behavior, neuroscience and youth research. The blog supports life-long learning and collective generation of solutions related to contemporary community-related challenges impacting on South African individuals, society and regulatory environments.

South African Youth Experience Complex Psycho-Social Challenges with Limited Support

South African Youth Experience Complex Psycho-Social Challenges with Limited Support

The YRU@BMR recently launched the YRU@BMR Youth Ambassador Research Program with the motto ‘’research by young people for young people’’.  The goal of the program is to give young people between the ages of 13 to 20 years, the opportunity to inform and participate in research projects and ultimately create a better future for young South Africans.

As part of the program, a pilot study was conducted including a total of 309 young people, across South Africa investigating three of the most pertinent psycho-social challenges faced by the youth, including substance abuse, online sexual exploitation, and cyberbullying.  This small-scale study investigated crucial components of the main study, which will be implemented by mid-March 2022.

The pilot study confirmed that tobacco, drug, and alcohol use among the youth remains widespread with most likely life-threatening consequences.  Similar to previous YRU@BMR research studies investigating substance abuse, the pilot study identified high levels of stress as a significant factor contributing to substance abuse among young people in South Africa.  Furthermore, the impact of the COVID-19 pandemic, and more particular school closures, cannot be ignored, as illustrated in the following verbatim quote: ‘’Children were at home in the townships where drugs are easily available’’ (Respondent, YRU@BMR Pilot Study).

Young South Africans are increasingly spending more time online, which increases their vulnerability to online risks and amplifies the need for effective online protection.  The pilot study confirmed that almost half the respondents (44.8%) have seen disturbing online images, which were mostly violent or sexual in nature.  These images were mostly seen on social media platforms with notable psychological and behavioural outcomes.  Concerningly, only 4.8% of respondents tried to get support after being exposed to sexually explicit material online, despite the impact on their emotions and behaviour.

The pilot study confirmed that cyberbullying is prevalent among South African youth and common forms of victimisation included false statements made about a person or threatening messages.  Further investigation found that mostly peer pressure (83.8%), exposure to online violent content (40.5%), and family problems (32.4%) motivate cyberbullying. Victims of cyberbullying experience mixed feelings including anger (62.2%), sadness (45.9%), and frustration (45.9%).  Similar to previous YRU@BMR research findings, victims of cyberbullying are less likely to report incidents and get the necessary support to deal with the incident and maybe try to deal with their own struggles.  This often results in retaliation which keeps the abuse cycle going, with more severe consequences for both the victim and perpetrator.

The findings of the pilot study emphasise the importance of available online support platforms such as call centres and hotlines among young people.  These platforms are easily accessible to most young South Africans and provide, immediate access to crises intervention and counselling for issues related to substance use and abuse, online sexual exploitation, and cyberbullying.

Click here to access the top-line report capturing the main findings and insights.

For more information about the YRU@BMR Youth Ambassador Research Program or to become a syndicate member of the program, contact Dr. A Basson at abasson@bmr.co.za

CONSUMER FINANCIAL VULNERABILITY INDEX: Q4 2021

Limited savings and over indebtedness hinder stronger consumer recovery in Q4 2021

Consumers became more financially vulnerable in Q4 2021 in terms of their ability to save and their ability to service their existing debts remained a concern. Fortunately, income improved substantially which neutralised the increase in their savings vulnerability.

The overall Momentum-Unisa Consumer Financial Vulnerability Index improved to 50.5 points in Q4 2021 (from 50.3 points in Q3 2021), leaving consumers less financially vulnerable compared to the previous quarter.

Highlights from the sub-indices of the CFVI in Q4 2021 are:

  • The income index increased to 53.7 points from 50.3 points in Q3 2021.
  • The expenditure index improved slightly from 52.4 points in Q3 2021 to 52.7 points.
  • The savings index deteriorated significantly from 50.6 points in Q3 2021 to 46.9 points.
  • The debt servicing index increased to 48.8 points from 47.8 points in Q3 2021.

The consumer finance landscape is vastly different compared to 2019, before the onset of COVID-19. For instance, in 2019 about 16.4 million consumers earned their income from employment, about 1.7 million more than in 2021. Subsequently, approximately 9.5 million people received a Social Relief of Distress Grant (SDR) of R350 per month, which had not been implemented in 2019. With more people receiving an income compared to 2019, overall income and expenditure vulnerability decreased in 2021 to marginally better than the 2019 level. Overall CFVI was still weaker compared to 2019, mainly due to worse savings and debt servicing positions. In annual terms, consumers were still in financially exposed in 2021 (average index value of 49.1 points), but the state of their finances improved compared to 2020 (average index value of 43.4 points).

Reasons behind the changes in the four sub-index scores

  • Consumers were less vulnerable in terms of incomes during Q4 2021. This can be attributed to many employees receiving year-end bonuses, the continuation of the SRD-grant and of higher salaries of civil servants, which collectively contributed to more consumers earning an income.
  • Debt servicing vulnerability was lower in Q4 2021. Notwithstanding the improvement, consumers’ debt servicing remained vulnerable. An increase of 25 basis points in the repo rate (in November 2021) made debt servicing less affordable.
  • Less income vulnerability assisted with lower expenditure vulnerability as more consumers could better afford their expenses. Nevertheless, consumer price inflation increased from 5% at the end of Q3 2021 to 5.9% at the end of Q4 2021, making it difficult for consumers to afford their expenses.
  • Consumers were more vulnerable in terms of savings abilities. As job losses continued, many consumers had to forego contributions to employee benefits such as saving for retirement. At the same time others used some of their savings for purchases.

The recovery in the CFVI in the last half of 2021 can largely be attributed to an improvement in the income streams of many consumers (ranging from salary increases paid to civil servants; to the re-introduction of the SRD-grants following the looting and riots in July 2021). However, in multiple instances millions of consumers could not keep their savings going due to a loss of income, while others had to use some of their savings as a means of income.

Expectations for Q1 2022

  • Key informants expect some notable changes in the economic environment in Q1 2022. The majority foresees the global economy to improve further, but for the South African economic situation to worsen, consumer price inflation to increase and an increase in the unemployment rate.
  • Key informants are uncertain about the prospects for consumer finances in Q1 2022, as they were almost equally divided in terms of an improving, unchanged, or worsening situation. A third of key informants expect an improvement, 34.3% expect consumers’ financial positions to remain unchanged and 30.3% expect a deterioration over the next three months.
  • Almost 70% of key informants estimate that it will take longer than two years for consumer finances to recover from the impact of COVID-19 and the lockdowns. The road to financial recovery seems to continue to be a long and hard one for South African consumers.

Please click HERE to download the full report.

About the index

As part of Momentum’s Science of Success campaign, the Index is one of the reports produced in the partnership between Momentum and Unisa that aims to provide South Africans with information and strategies on how they can accelerate their journey to financial success. The CFVI is compiled from the views of key informants (researchers, bankers, insurers, retailers, government, economists, analysts, etc.) who deal with consumers daily.

 

Panel of economists predicts continuation of economic woes for South Africa during 2022

Panel of economists predicts continuation of economic woes for South Africa during 2022

The economic woes of the past decade appear to continue according to the 35 participants of the Bureau of Market Research (BMR) Economist of the year competition. Based on the consensus (median) score of the participating economists’ forecasts, economic growth will decline to about 2% during 2022, which is below the National Treasury’s forecast of 2.1% announced by the Minister of Finance in the 2022 budget speech, and substantially lower than the revised National Treasury’s estimate of 4.8% for 2021. According to the 2022 National Budget forecast, the average GDP growth rate for the period 2023 to 2025 is expected to be even lower at 1.8%, which implies a prolonged period of poor economic growth. The implication of this economic stagnation is that investor confidence and job creation will remain low, severely impacting the financial vulnerability of South African consumers. This view is evident from the latest economic predictions by the panel of economists who are forecasting a rather conservative consensus estimate of 2.2% with respect to real household consumption expenditure growth during 2022. This forecast is substantially lower than the estimated real household consumption expenditure growth rate of 5.7% during 2021.

Rising headline inflation is expected to exacerbate adding to the economic woes of South African consumers. The consensus among the panel of economists anticipates the inflation rate to increase to about 5.1% during 2022.  This figure is substantially higher than the 4.5% experienced during 2021. It is especially worrying that during January 2022 the most financially vulnerable consumers (lowest expenditure deciles) also experienced higher levels of price inflation compared to the less financially vulnerable consumers, making them even more financially vulnerable.  Income and expenditure inequalities in South Africa therefore appear to be increasing thus exacerbating existing socioeconomic and political instabilities.

Other areas of serious concern arising from the forecasts point to the rise in the prime interest rate which is expected to increase to 8.25% by the end of 2022 (compared to the current 7.5%).  Furthermore, the Dollar price of Brent Crude oil per barrel (which is a leading indicator of future domestic fuel prices for South Africa as a net importer) is expected to increase from the 2021 average of $70.70 dollars per barrel to $78.00 during 2022. Giving impetus to an anticipated increase in fuel prices during 2022 is the expected depreciation of the value of the South African Rand against the US Dollar, which is expected to weaken further from the current ZAR15.01/USD to ZAR15.67/USD by the end of 2022.

Taking into account the discouraging forecasts of the panel of economists and those of the National Treasury (as provided in the 2022 Budget), the question remains if the Budget will give rise to a new economic framework which should lay the groundwork for higher economic and household expenditure growth as well as greater price and currency stability during 2022. The Budget which has already been termed by the media as ‘boring but responsible’ is in itself not optimistic in this regard, indicating that low economic growth rates will persist for some time with accompanying downside risks inclusive of fiscal pressures, instabilities at State Owned Enterprises, electricity generation and institutional challenges at Eskom, the high public wage bill and government debt – collectively giving rise to large-scale fiscal constraints.

Despite the overwhelmingly discouraging views expressed by the panel of economists, the poor outlook for the South African economy will prevail if the right macroeconomic policies are not crafted and executed. The National Budget provides the first green shoots for such a turnaround as evidenced by the ‘tough love’ government policy towards the finances of State Owned Enterprises, the renewed commitment to the acceleration of infrastructural development, the stronger focus on support to SMMEs, the strengthening of the public employment programme as a short-term measure to address massively high levels of unemployment and poverty, the provision of higher employment tax incentives to stimulate employment, a fuel levy holiday during 2022/23 to curb the rise in fuel prices and the reduction in the marginal corporate income tax rate from 28% to 27% during 2023.

Enquiries:
Prof CJ van Aardt
Research Director:  Bureau of Market Research (Pty) Ltd
carel.vanaardt@bmr.co.za

Household financial wellness deteriorates as more consumers battle to make the right financial choices due to factors outside of their control

Household financial wellness deteriorates as more consumers battle to make the right financial choices due to factors outside of their control

 

Over the past 10 years, the Momentum/Unisa Household Financial Wellness Index has given South Africans practical tips from experts to empower them to get serious about their finances and gain momentum towards achieving their financial goals. Over the years, the research findings have helped South Africans understand behaviour when it comes to financial matters and the formula to achieve financial success in their household finances.

This year, Momentum and Unisa aimed to provide South Africans with the ‘discernment advantage’ – the clarity that gives them the freedom to make the right financial choices and enhance their financial brain power with the third annual Science of Success festival. A hybrid event was held on 24 November 2021, inviting key stakeholders and influencers to attend a physical event, and streaming the event on social media platforms to share the insights with the general public.

Insights were drawn from the latest Momentum-Unisa Household Financial Wellness Index. The festival unpacked the report in bite-size pieces to highlight how certain behaviours can accelerate or decelerate one’s journey to financial success. Guests interacted with experts to sharpen their financial skills and behaviours through education stations across the festival.

Based on results from the Momentum/Unisa Household Financial Wellness Index (depicted in figure 1), South African households’ overall Financial Wellness score recorded a steep decline from 68.7 points in 2018 to 65.2 points out of 100 (where ‘100’ is indicative of total household financial wellness) in 2020. The results are based on a nationally representative sample of 2 868 households that were interviewed during early 2021.

The decline in the overall Financial Wellness score was mainly caused by the unfavourable impact of COVID-19 and the resulting lockdowns on the economic (macro), community (meso), and consumer (micro) environments:

  • Macro-level: In 2020 the global economy shrank thus negatively impacting the local economy as South Africa is heavily dependent on international trade for economic growth and employment.
  • Meso-level: Due to COVID-19 lockdown regulations several businesses and NPO’s were compelled to close-down or suspend their operations. This affected especially businesses considered to be providing non-essential services, leading to a loss of revenue and job cuts. This situation gave rise to higher business vulnerability, and here especially among small businesses and NPO’s, which play an important economic role in terms of employment creation, contributions to economic growth and tax revenue, as well as catering for community needs.
  • Micro-level: The factors that affected households’ finances include for example loss of employment and income, low net wealth and saving growth rates for especially low- and middle-income households, low levels of financial literacy among consumers and households finding it more difficult to obtain affordable credit and to service existing credit.

The Momentum/Unisa Household Financial Wellness Index comprises of five components/capitals, which are resources that determine households’ state of financial wellness. Table 1 shows the movement in the five components compared to those of the previous survey. When considering these components, larger adverse impacts were recorded for households’ income and personal empowerment levels opposed to their wealth, living conditions and education components during 2020.

The Index research further indicated a general downward shift away from households being Financially Well to the lower Financially Unwell groups in 2020 (see figure 2). Compared to 2018 a smaller share of households was financially well in 2020, declining from 28.6% to only 22.4%.

What the research also revealed, is that the path to financial wellness is enabled by achieving financial success. Financial success is intrinsically linked to setting financial goals and actively working towards achieving them. About 45% of households indicated they don’t have financial goals. Households that do have one or more financial goals indicated a clear preference for some specific goals. The most popular financial goal among households is to generate wealth through long-term investments. But, preferring a financial goal does not mean households were successful in achieving them. Only 17.4% of households indicated they have one or more financial goal and that they were on track to achieve all their financial goals.

The report further provides insights to the financial wellness of households where women and youth were the respondent as the financially knowledgeable person (a person that can provide detailed information on financial aspects of the household).

Click here to download the full report.

Visit https://www.momentum.co.za/momentum/campaigns/general/science-of-success-2021 for more information.

The Unisa research team involved in compiling the report consists of Ms Jacolize Meiring (Bureau of Market Research), Prof Carel van Aardt (Bureau of Market Research), Prof Bernadene de Clercq (Unisa College of Accounting Sciences), Mr Arthur Risenga (Bureau of Market Research) and Ms Jacolize Poalses (Bureau of Market Research).

 

 

South African retail to get R11.3 billion boost from Black Friday over November 2021

Research commissioned by Capital Connect shows good retail sales recovery compared to 2020.

South African retailers are expected to ring up around R11.3 billion rand in additional sales over the period of November as consumers splash out on Black Friday deals, with general dealers expected to capture a 55% (R6.2 billion) share of the value. That’s according to new research conducted by the Bureau of Market Research on behalf of Capital Connect, the Fintech business funding division of The Connect Group.

Additional November retail sales due to Black Friday are forecast to be significantly below the R15.4 billion generated in 2019, but also representing a strong recovery from the R10.3 billion over November 2020. The research shows that Black Friday sales and promotions will generate a further R8.2 billion in wholesale impact, translating into a total retail and wholesale impact of R19.5 billion.

Retailers in textiles, clothing, footwear and leather are expected to ring up nearly R2.8 billion in additional sales, while retailers in hardware, paint and glass are forecast to generate around R973 million in extra value.  Household furniture, appliance and equipment retailers are also forecast to generate close to R904 million in additional sales.

“Since South African retailers embraced the Black Friday concept in 2014, we have seen sharp rises in retail sales each November, pandemic disruption aside. It’s a golden opportunity for retailers to boost their sales and profits,” says Steven Heilbron, CEO of the Connect Group and spokesperson for Capital Connect. “Forward-thinking retailers have stocked up and enhanced their in-store shopping experiences in anticipation of the Black Friday weekend.”

 Black Friday gets longer every year

Aligned with the trends seen in 2019 and 2020, we can expect to see Black Friday promotions continue to stretch out longer than in previous years, with sales expected to run from 2 November to 5 December this year. The Bureau forecasts that in-store, hybrid (multi-channel) and omni-channel retail will win around 84% of sales, while online-only retailers will capture about 16% of Black Friday-related sales over November.

“This Black Friday and Festive Season retail trading period will see a global resurgence in in-store shopping as stores aim to attract lockdown-fatigued consumers with experiential shopping offerings that entertain and educate. The stores that offer the most compelling shopping experiences will be big winners as consumers get out and about while their vaccine immunity is strong and COVID rates are low,” adds Heilbron.

“Another unfolding trend is a shift towards ‘always-on,’ omni-channel experiences. Retailers will be looking at how they can drive foot-traffic into their stores via social media and ecommerce. Even online-only stores are starting to bring pop-up shops or full branches to shopping malls to adapt to changing consumer behaviour.”

Back into the malls

Carel van Aardt, Professor and Research Director of the Bureau of Market Research, says spending will be driven by the middle and affluent markets buying luxury goods at discounted prices volume and middle markets buying necessities in bulk, and consumers in the volume, middle and affluent markets purchasing discounted goods as part of their Christmas shopping.

“Excellent in-store experiences with respect to customer service, value for money, variety, in-store availability of goods, shopper-tainment, strong brand and friendly staff are critical for good sales,” he adds. “As lockdown levels soften, consumers are moving back to in-store buying. Even during the harder lockdowns, the biggest ecommerce winners were omni-channel store-based brands.”

Heilbron adds: “Black Friday is a great opportunity to boost sales, but proactive retailers see every day as a chance to grow their business and move it to the next level. In the Next Normal, leading retailers are constantly looking for ways to improve in-store shopping experiences, save with bulk buys at discounted rates, diversify their offering or increase sales/turnover.

“Fintech solutions like Capital Connect give retailers access to hassle-free business funding in 24 hours to ensure that they don’t lose out. There are many ways for retailers to grow their business and the capital is available. It’s in the retailers’ hands to grow, innovate and thrive by taking advantage of the opportunities in the market.”

Click here to download the “The Next Normal for SA Retail”

Best Paper Award at PAMRO Annual Conference

The Pan African Media Research Organisation (PAMRO) was established 20 years ago as a non-profit organisation (NPO) by a group of professionals who realised that for Africa to become a major international player in the media, marketing and advertising spaces a media and consumer research industry body spanning the various African countries was required.  The goal was to gain insight and develop a deeper knowledge of consumer and media behaviour in Africa that could inform decisions on how best to reach and communicate with specific target markets.

PAMRO hosted its annual conference from 26 to 28 October 2021, comprising of presentations from global brands operating in Africa and real-life case studies from the continent.  Prof van Aardt represented the BMR at the conference by presenting his paper entitled “Towards a Multi-dimensional Consumer Segmentation Tool for South Africa”.  The very insightful and well researched paper provided a detailed background to the BMR’s Consumer Market Segmentation model that was developed in collaboration with the Market Research Foundation (MRF).  The paper focused on the development of the model, the model structure and segment descriptors, and revealed some model results.

We are extremely proud and would like to congratulate Prof van Aardt who won the best paper award for his presentation at the conference.  This award is the cause of great excitement as the BMR views this as an indication of the market and media research fraternity buying into the BMR consumer market segmentation tool. The BMR is currently working closely with the Market Research Foundation (MRF) to finalize this segmentation tool and to introduce it fully into the 2021 and future PAMS data releases for use by industry.

Congratulations Prof van Aardt!!  We are extremely proud and honoured to have you as part of the BMR Team!

CONSUMER FINANCIAL VULNERABILITY INDEX: Q3 2021

Grants reduce consumer financial vulnerability during Q3 2021

The state of South African consumers’ personal finances recovered to its best level in more than two years during Q3 2021. The Momentum-Unisa Consumer Financial Vulnerability Index (CFVI) increased to 50.3 points in the third quarter of 2021 (Q3 2021), a level last observed in Q2 2019. This follows a deterioration to 45.9 points in Q2 2021 from 49.7 points in Q1 2021.

Although the CFVI is at the same level as in Q2 2019, consumers are generally still in a financially vulnerable state. Millions of consumers’ financial positions are vastly different than two years ago. Since Q2 2019, almost 1.4 million workers lost their jobs and income. But almost 6 million Social Relief of Distress (SRD) grant payments of R350 per month were made in Q3 2021. This suggests that the recovery in the CFVI was driven more by the reinstatement of the SRD-grant than by job creation.

The spill-over effect of the SRD-grant, among others, seems to have had a positive effect on all sub-indices of the CFVI in Q3 2021 as:

  • The income index increased to 50.3 points from 47.4 points in Q2 2021.
  • The expenditure index improved from 48.4 points in Q2 2021 to 52.4 points.
  • The savings index improved most, namely from 42.7 points in Q2 2021 to 50.6 points.
  • The debt servicing index increased to 47.8 points from 44.9 points in Q2 2021.

The decline in the CFVI therefore reflects that the majority of consumers are feeling financially exposed and insecure, meaning that any small adverse event (e.g. pay cuts) can contribute to a large deterioration in the state of their personal finances. When interpreting the CFVI, it is important to keep in mind that a small number of consumers earn the bulk of the income and are responsible for most of the spending, saving and debt servicing in the economy.

 Reasons behind the changes in the four sub-index scores:

  • Consumers’ income vulnerability declined. This can be attributed to millions more consumers gaining from the reinstatement of the SDR-grant and extension of TERS payments compared to those who were negatively affected by the looting and riots. The looting and riots, which stretched from 9 July to 18 July 2021, may according to some reports have contributed to over 100 000 job losses. However, government’s announcement that affected workers may claim from the Temporary Relief Scheme (TERS) would have alleviated some of the financial pain. However, the main reason for the improvement can be attributed to the reinstatement of the R350 per month SRD-grant. Since the first payment on 25 August 2021, more than 5.6 million payments were made to consumers in Q3 2021, improving their income prospects until at least March 2022.
  • Debt servicing vulnerability was lower. Low interest rates continued to assist cash-strapped consumers in Q3 2021, whilst new unsecured credit contracted in real terms compared to a year ago.
  • Less income vulnerability assisted with lower expenditure vulnerability as more consumers could better afford their expenses. However, rising consumer prices as reflected by especially higher food-, municipal-and fuel price inflation, would have made some essential products less affordable to the majority of consumers in Q3 2021, reducing the positive effect of lower income vulnerability. Spending was also curtailed by COVID-19 level 4 restrictions which was in place for most of Q3 2021.
  • Savings vulnerability declined, partly due to less income vulnerability, but also because of COVID-19 level 4 restrictions which prevented more spending. However, it was more the middle-to higher income groups whose savings benefitted from the level 4 restrictions.

Least financially vulnerable in Q3 2021

The key informants were asked to indicate which consumers they deem to be least financially vulnerable during the past quarter based on their interactions with consumers and their perceptions of consumer financial behaviours. They indicated that full-time workers in the public service are deemed to be the least financially vulnerable (65.6% of key informants indicated they are the least financially vulnerable group in terms of employment status). As for the other least financially vulnerable demographic groups, the key informants identified them as consumers earning more than R30 000 per month; being 40 years and older; working in the services sector; mostly males and married couples.

Expectations for Q4 2021

Key informants expect some notable changes in the economic environment in Q4 2021. The majority foresees consumer price inflation to increase, a higher unemployment rate and a worsening South African economy. In contrast, most expect the international economy and the financial situation of South African consumers to recover further.

Although most key informants expect the financial situation of consumers to recover in Q4 2021, it is noteworthy that this majority is only 37.3%. With 30.1% expecting consumers’ financial situation to remain unchanged and 32.2% expecting it to worsen, the coarsely equal distribution reveals the level of uncertainty among key informants.

The matter gets settled, though, when analysing key informants’ view on how long they expect it to take for consumers’ finances to recover. Nearly 71% expect that it will take more than two years for consumer finances to recover, with the majority (of the 71%) expecting it may even take more than three years.

Please click HERE to download the full report.

About the index
As part of Momentum’s Science of Success campaign, the Index is one of the reports produced in the partnership between Momentum and Unisa that aims to provide South Africans with information and strategies on how they can accelerate their journey to financial success. The CFVI is compiled from the views of key informants (researchers, bankers, insurers, retailers, government, economists, analysts, etc.) who deal with consumers daily.

Convergence Survey Report: Film and Publication Board – October 2020

Media content classification in South Africa carries features of deliberative democracy. A clean break from the apartheid-era censorship, the Film and Publication Board (FPB) pursues its mandate through an inclusive, deliberative fashion and is consistent with the country’s constitution. Nalkur; Jamieson & Romer (2010) argue, consensus about the effectiveness and accuracy of age ratings on film, video games and other entertainment platforms is not fait accompli.

This Convergence Survey seeks to assess concordance between FPB’s ratings and general societal values and norms. The survey uses a quantitative research approach, focusing on parents and children 15 years and older. Interviews were conducted with 7 000 respondent’s representative of the SA demographic. A key finding is that parents generally play a limited role in the choice of films and video games children play. However, parents felt that the ratings allocated to media content is lenient.

Please click HERE to download the full report.

TRACKING MOOD STATES CONSIDERING THE COVID-19 PANDEMIC

The 2021 syndicate research report by the Behavioural and Communication Research Division decided to utilise the annual Happiness Index data somewhat differently.  Since the onset of the COVID-19 pandemic, health has become the predominant driver of happiness, affecting mood states, and influencing the consciousness of South Africans and consequently also their behaviour.  The media’s pervasive coverage and influence on the response to the pandemic makes the research on general mood states and mood states experienced during the pandemic particularly topical.  To this end, the self-assessment manikin (SAM) measure used in the cross-sectional Happiness Index study since 2012 (Joubert & Poalses 2012) is suited to measure moods due to underlying theoretical assumptions underlying the instrument.  By limiting the data analysis to a single instrument provides rich and focused information, focusing on the reflection of life in greater depth, and providing a more prominent concept of well-being.

A series of events that preceded the advent of the COVID-19 pandemic and resultant lockdowns are presented. These included, amongst others, the swearing in of Matamela Cyril Ramaphosa to a five-year term as president of South Africa, national elections, inequality, unemployment, corruption, economic insecurity, the Commission of Inquiry into allegations of State Capture, xenophobic violence, the rights of people with disabilities, gender-based violence, the right to health and a healthy environment, Eskom’s load shedding and student protests.  These emotively laden matters escalated and are regarded important and newsworthy political and socio-economic incidents and occurrences that could have already had an impact on the mood states of South Africans when the pandemic and national lockdown eventually ensued.

An analytical synopsis of positive, negative, and ambivalent mood state measures from 2012 to 2020 is presented below.  The range of colours represent the year-to-year trends, with dark green being most favourable followed by the lighter greens, then yellow, orange and lastly red being most negative.  It should be noted that the figures displayed represent overall trends, and any interpretation thereof is general in nature, as significant demographical and socio-economic differences are evident.  Disaggregated analyses and interpretations with comparative general and COVID-related mood states are presented in the comprehensive BMR syndicate research report.  These include age, gender, population group, relationship status, province, education, personal income, and employment status.

Upon closer examination it is evident that approximately three in four participants expressed positive moods between 2012 and 2018.  The 2020 general mood state rating remained comparable to previous years suggesting that participants are able to express how they feel with greater confidence, without a sense of ambivalence about it. When confronted with the Covid-19 pandemic ambivalent general mood states have, however, increased considerably during 2020.  The implication for consumer and business behaviour is that these moods influence attitudes and ultimately the intentionality of behaviour. A strong emotive state, whether positive or negative, will influence the sentiments driving decision making and ultimately the behaviour of consumers.

Demographic variables showing the greatest difference between the general and COVID-19 positive mood states revealed interesting findings to be of value to marketers as this insight into specific consumer segments could be of strategic importance for certain products and services.

In addition, the research also gauged qualitative insights to obtain a more in-depth understanding of the emotive impact of COVID-19 on well-being, whether positive or negative.  While substantially more comments alluded to a negative influence on well-being, a large number of comments indicated a positive sentiment, and a few also indicated both positive and negative.  In short, the following predominant positive and negative themes emerged from the array of verbatim comments:

Interesting findings were revealed across all demographic variables.  However, the most telling findings resulted from measuring the difference between the general mood and the COVID-19 mood.   All demographic variables yielded statistically significant differences.   The COVID-19 pandemic has had a profound impact on human lives, claiming about 4 million deaths worldwide, of which more than 62 000 deaths occurred in South Africa at the time of this report.  As such, there are increasing calls to consider the impact of COVID-19 on people’s psychological well-being and mental health.  It is important to keep the information about the Coronavirus, pandemic, and lockdown salient, honest, transparent, and forthcoming.  The role of the South African Government, media releases and research of this nature are therefore deemed pivotal in the manner in which the South African population may be perceiving the pandemic emotively.  From a consumer perspective, consumers have been necessitated to approach their purchasing behaviour differently, and in response to this, marketers would generally have had to adjust their marketing appeals and campaigns accordingly to align to different lockdown level protocols. The findings from this study confirms the significantly change in emotive mood states caused by the ubiquitous presence of COVID-19 and presents a number of guidelines for marketers to take into consideration during marketing campaigns when targeting specific markets.

TRACKING MOOD STATES CONSIDERING THE COVID-19 PANDEMIC (Research Report No 514).  For any enquiries regarding the research study, please contact Ms Jacolize Poalses at jacolize.poalses@bmr.co.za or Prof Pierre Joubert at pierre.joubert@bmr.co.za who are the compilers of the report.

CONSUMER FINANCIAL VULNERABILITY INDEX: Q2 2021

Consumer finances impacted negatively on all levels during Q2 2021

The state of South African consumers’ personal finances deteriorated during the second quarter of 2021 (Q2 2021) following a gradual improvement since Q2 2020. Higher levels of financial vulnerability in Q2 2021 were caused amongst others by the COVID-19 social relief grant which ended in March 2021, pressures of rising fuel and food prices, high unemployment and limited salary increases. The impact of these and other factors are reflected in the Momentum-Unisa Consumer Financial Vulnerability Index (CFVI) which decreased to 45.9 points from 49.7 points in Q1 2021.

The drivers that led to the lower CFVI score were the significant decline in consumers abilities to save and limited employment opportunities, which were exacerbated by below-inflation salary increases and absence of social relief grants – making it difficult for consumers to live within their means during the past three months.

  • The income index weakened from 50.2 points in Q1 2020 to 47.4 points in Q2 2021.
  • The expenditure index declined from 52.3 points to 48.4 points over the same period.
  • The savings index deteriorated the most, declining by 6.1 points to 42.7 points in Q2 2021.
  • The debt servicing index decreased from 47.5 points in Q1 2021, to 44.9 points in Q2 2021.

The decline in the CFVI therefore reflects that the majority of consumers are feeling financially exposed and insecure, meaning that any small adverse event (e.g. pay cuts) can contribute to a large deterioration in the state of their personal finances. When interpreting the CFVI, it is important to keep in mind that a small number of consumers earn the bulk of the income and are responsible for most of the spending, saving and debt servicing in the economy.

 The main reasons behind the changes in the four sub-index scores:

  • Income vulnerability increased during Q2 2021. The main constraint to consumer incomes is the inability of the economy to create jobs for a large portion of the population. This made obtaining or retaining employment extremely difficult, which – as a result – negatively influenced consumers’ income earning prospects. In addition, the COVID-19 social relief grant of R350 per month came to an end in March 2021.
  • Higher levels of expenditure vulnerability for Q2 2021. Compared to Q1 2021, a larger portion of key informants believed consumers’ expenditure tended to exceed their incomes, thereby impacting their ability to remain within budget. The majority of key informants were of the view that consumers generally tend to live beyond their means and not demonstrate self-control when it comes to spending.
  • Savings vulnerability also increased in Q2 2021. It seems as if consumers struggled to save in general. This is confirmed by a larger percentage of key informants disagreeing with the statement that consumers’ ability to save improved in Q2 2021. This also includes saving more for retirement. Many key informants also indicated that consumers unfortunately did not have greater access to emergency savings in Q2 2021. Many consumers have been forced to sacrifice saving in order to cover expenditure and service their existing debts.
  • Consumers were more vulnerable in terms of debt servicing capabilities in Q2 2021. Low interest rates assisted in limiting debt servicing costs, but given the pressure on income and expenditure, consumers had limited funds to repay outstanding debts. It appears some consumers’ financial circumstances might have continued to call for a cancellation of financial obligations.

The key informants were asked to indicate which consumers they deem to be most financially vulnerable during the past quarter based on their interactions with consumers and their perceptions of consumer financial behaviours. Key informants highlighted that the youth (those below 39 years) tend to be the most financially vulnerable consumers. This was the opinion of more than two thirds (71.3%) of key informants. This corresponds to the economic struggles that this market segment faces, including high unemployment and the pressures brought about due to changes in life stages (such as student loans, getting married or having children).

Some observations made by key informants concerning the financial behaviour of consumers include:

  • The psychological toll of the pandemic is greater than one might realise.
  • Consumers tend to be very negative about the country and do not feel in control of their lives.
  • Consumers in low-income groups tend to rely on government for support and survival and not so much on creating their own sources of income.
  • Consumers have changed their buying behaviour as the pandemic accelerated the adoption of digital products and services, such as online grocery shopping.
  • The pandemic has undermined the feeling that long-term planning is important, with consumers having a survival mindset and not taking tomorrow into consideration.

The majority of consumers in South Africa are struggling financially, given sluggish job creation and the pressures of prices of goods and services which are rising at a faster rate than incomes. Consumer finances will remain volatile for some time to come, supported by the majority view of key informants that such a recovery could take more than two years following the initial shocks brought about by the Covid-19 pandemic and subsequent lockdown.

As part of Momentum’s Science of Success campaign, the Index is produced in partnership with Unisa. It aims to provide South Africans with information and strategies on how they can accelerate their journey to financial success. The CFVI is compiled from the views of key informants (researchers, bankers, insurers, retailers, government, economists, analysts, etc.) who deal with consumers daily and/or study consumer finances continuously.

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