Consumers Prioritise Essential Goods As Inflation Strains Finances - Transunion Study

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The findings highlight a consumer environment shaped by ongoing financial pressure, where households are not only feeling the impact of rising costs but actively adapting their behaviour to maintain stability.

Inflation remains the top concern

Inflation on everyday goods continues to weigh heavily on consumers, with 41% of respondents identifying it as their primary financial concern.

At the same time, 35% of those surveyed expect they will be unable to pay at least one bill or loan in full—underscoring the strain on household budgets.

Despite these challenges, sentiment remains cautiously optimistic.

Sixty-nine percent (69%) of consumers say they are optimistic about their household finances over the next 12 months, although this has dipped from 72% in Q4 2025, signalling more measured confidence.

“Consumers are not necessarily experiencing financial ease, but they are responding in practical ways to manage pressure,” said Ayesha Hatea, director of research and consulting at TransUnion South Africa.

“What we are seeing is a shift toward more deliberate financial behaviour, where households are actively adjusting spending, prioritising obligations and, where they can, building financial buffers.”

Cutting back while building resilience

In response to persistent cost pressures, many South Africans are tightening discretionary spending. The study found that 51% of consumers reduced non-essential expenses such as dining out, travel and entertainment, while 31% cancelled subscriptions or memberships.

At the same time, a growing number are taking steps to improve their financial position. Thirty-five percent (35%) of respondents reported paying down debt faster, while 29% increased contributions to emergency savings or stokvels, and 23% boosted retirement savings.

“These behaviours reflect a more cautious and intentional approach to money management,” Hatea noted.

“Consumers are looking for ways to maintain stability, whether by reducing non-essential expenses, managing debt more actively or setting aside funds for future needs.”

Spending expectations shift toward essentials

Looking ahead, consumers expect essential expenses to take up a larger share of their budgets. Around 35% anticipate increased spending on bills and loans, including housing, utilities and credit obligations, while an equal percentage expect higher medical costs.

Future-focused spending is also gaining priority, with 38% planning to increase contributions to retirement funds and investments.

By contrast, fewer consumers expect to increase spending on discretionary categories such as retail shopping (29%), large purchases like appliances and vehicles (26%), digital services (25%) and general discretionary spending (21%).

“This pattern suggests that consumers are prioritising essential and future-oriented expenses, while remaining more selective in discretionary areas,” said Hatea. “It reflects a mindset where financial decisions are being made with greater scrutiny.”

Credit use continues, but with caution

Access to credit remains a key financial tool, but attitudes toward borrowing are becoming more cautious. The study shows that 41% of respondents have used Buy Now, Pay Later (BNPL) services in the past year, primarily to avoid credit card interest.

However, among those who have not used BNPL, the most common reason cited was a desire to avoid taking on additional debt—highlighting a growing awareness of financial risk.

“The role of credit is evolving,” Hatea explained. “Consumers still rely on it to manage cash flow and navigate short-term pressures, but there is also a clear awareness of the need to avoid overextension.”

A more pragmatic consumer landscape

Conducted in late February, prior to recent geopolitical developments and the latest Monetary Policy Committee decision to hold the prime lending rate steady, the study reflects a moment of cautious adjustment rather than financial recovery.

Overall, the data points to a shift in mindset: South Africans are not simply reacting to economic pressure, but actively recalibrating how they spend, save and borrow.

“Rather than a broad sense of financial confidence, we are seeing a more grounded and pragmatic approach,” said Hatea. “Consumers are making deliberate trade-offs to stay on top of their obligations and build resilience where possible.”

As cost pressures persist, this more disciplined and adaptive financial behaviour is likely to define the South African consumer landscape in the months ahead.