This report is about spending in the Home category, but first let’s have a look at general spending trends that emerged during July. Apparel was a standout category: 22seven user spending on clothes and footwear held up well – it was one of the few categories to record stronger growth. Elsewhere, spending growth slowed once again.
Spending on Prepared Food Delivery decelerated the most of all categories, perhaps signalling an end to the boost that services like Uber Eats and Mr D Food enjoyed as a result of load-shedding, which peaked in April and May and has since moderated.
Once again, the fastest-growing spending category that we track was Sports Betting & Lotto. Although it remains relatively small compared to other categories, it continues to grow rapidly.
We identify similar trends within income segments, shown in the table below. In general, the intensity of decelerating growth is more prevalent in the lower two income brackets: users earning less than R40k pm.
Home truths
This month’s Shop Talk focuses on the Home category, which we broadly segment into three sub-categories: DIY & Garden, Furniture & Homeware, and General Merchandise (GM).
GM is the largest of these and includes Takealot, Makro and Game, as well as electronics-biased retailers like JD Tech (Incredible Connection and HiFi Corp). Naturally, there’s overlap between the sub-categories and there’s an element of judgement required to categorise the retailers.
The three largest retailers in each sub-category are highlighted below. The structure of each market is similar, with one main retailer making up 32-42% of total spending; two retailers of roughly equal share as runners-up; and a large number of other retailers (25-35) making up the remaining 35-45%.
The earlier charts show that user spending in the Home category has been the weakest of all the major categories during the past year. When we look at the last three months, our data suggests that this weakness has been concentrated in the Furniture & Homeware sub-category.
The next chart shows relative spending growth among a sample of major retailers within Furniture & Homeware. Yuppiechef and West Pack Lifestyle outperformed while Hirsch’s lost ground.
To get a snapshot of what middle-income shoppers are spending in the broader Home category, we segmented spending into income brackets. In the R15-25k pm income bracket, users spent R657–R1,077 per month at retailers in the three sub-categories.
The chart below further breaks down this average monthly spend into average transaction value and frequency of transactions. In this example, average transaction values at Furniture & Homeware retailers are comparable to average transaction values at General retailers. The difference is that users transact ~23% more often at General retailers, which leads to a higher average monthly spend per user in that category. DIY & Garden retailers capture the lowest average monthly spend, mainly due to low average transaction values.
That’s it for this month. There are many more insights available from our spending dashboards. Please set up a time to discuss these in more detail to ensure you get the most from this unique data set.
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