Consumer confidence surges as South Africans prepare for festive spending

With Black Friday all wrapped up, South African consumers will now look ahead to the festive season, keeping a close eye on deals and their wallets. 

In a promising sign for the South African economy, consumer confidence has experienced a marked rise heading into the festive season, as revealed by Momentum Investments' latest Consumer Pulse report.

The findings for the fourth quarter of 2025 indicated an improvement in the Consumer Confidence Index (CCI), climbing from –13 to –9, the highest level noted this year and a welcome change from the previous quarter’s downturn.

This increase is particularly significant as households gear up for the traditional rise in spending during the festive period.

While there are indicators that household spending may take a hit later in the year due to declines in two-pot withdrawals, the overall situation appears balanced by lower interest rates and a gradual easing of consumer pessimism.

Momentum Investments projected household expenditure to grow by 2.7% in 2025, followed by a further 2% in 2026, reflecting a degree of optimism as we enter the summer holiday season.

Among the report’s more striking findings is the notable increase in betting activity amongst South African consumers.

Although gambling turnover appears substantial, it’s revealed that only 5% of this amount results in actual losses.

This situation implies that a lot of this turnover could be viewed as recycled betting money, prompting a closer examination of the behavioural patterns of South African consumers as they navigate both spending and leisure activities.

In conjunction with the Consumer Pulse report, the FNB/Bureau for Economic Research (BER) has also released its CCI findings, confirming the positive trend.

The index, though still below the long-term average of –1 and slightly lagging behind the festive season number from 2024 (-6), illustrates an encouraging upward trajectory.

With retail sales volumes having grown by an average of 3.9% year-on-year during the first three quarters of 2025, the predictions for a bustling festive shopping season become increasingly likely.

The surge in consumer confidence has roots in a few key factors, particularly the improved sentiment towards purchasing durable goods such as vehicles and electronics.

This sub-index saw an impressive jump from –20 to –14, the best level since mid-2019.

With lower interest rates and a stronger rand making big-ticket items more accessible, many households are showing a renewed readiness to invest in durable goods.

All three sub-indices of the CCI improved in the fourth quarter, with durable goods sentiment, economic outlook, and household finances all showing promising gains.

While middle-income households (earning between R5 000 to R20 000 per month) demonstrated the strongest recovery, reducing their index from –16 to –8, low-income households edged slightly upwards from –9 to –8.

High-income earners, however, faced a slight decline in confidence, underscoring a complex economic landscape.

FNB's Chief Economist, Mamello Matikinca-Ngwenya, noted that the improved sentiment reflects a gradual rise in willingness to spend, particularly amongst middle-income consumers.

"Retail tills are expected to resonate with cheerful sounds this festive season, with sales projections likely to surpass those recorded in 2024," she stated.

Without a plan, however, festive cheer can quickly turn into financial fear when January rolls around.

FNB shared a few tips to help consumers stretch their rands a little further this festive season. 

Set a festive budget and stick to it

Start by listing all your expected expenses: gifts, groceries, travel, events, entertainment, and even those spontaneous “let’s do lunch” plans. Then assign realistic spending limits to each category. Digital budgeting tools and apps can help you track your spending in real time and stay on course.

Shop with intention, not emotion

Festive deals are everywhere, but not every discount is a saving. Make a gift and grocery list before heading to the shops and start early to avoid panic buying. Use loyalty programmes like eBucks Rewards to pay for essentials such as groceries, gifts, fuel and airtime at partner retailers.

Avoid the debt trap

The temptation to swipe now and worry later is real, but holiday debt can follow you well into 2026. FNB encouraged responsible credit use: only borrow if you have a clear repayment plan.

Plan for January – It’s longer than it looks

School fees, uniforms, transport, rising utility bills, January often brings a wave of expenses that can catch you off guard if you’re not prepared. Create your January budget before December shopping begins.

Don’t forget the emergency fund

Life happens, a car breakdown, medical emergency, or sudden travel needs can derail your finances fast. An emergency fund, even a modest one, can help you avoid high-interest loans when you’re in a pinch.

Though overall consumer sentiment is still in a cautious place, the modest uptick signals a potential increase in spending power, which could offer a refreshing boost to the economy.

Unisa economist Dr Eliphas Ndou acknowledged that these changes are mostly positive, yet he cautioned that high-income groups need to exhibit greater spending habits to significantly raise household consumption, as they have a high propensity to consume.

BUSINESS REPORT