Gauteng Business News

Send  Share  RSS  Twitter  27 May 2010

CONSUMER:  Consumer Spending Up 10% As More Credit Cards Get Swiped


Recent Gauteng Business News

Consumer spending is moving up strongly in percentage terms according to credit card swipes, but the value being spent is down and debit card use which rose strongly in December plummeted in the first quarter of this year.

“The statistics are encouraging and interesting,” Paul Kent, managing director of SureSwipe, independent credit card swipe machines said in Johannesburg. SureSwipe statistics show that December 2009 was down in rand spending terms 6,7% compared to December 2008, however, January 2010 dropped only 0,8% compared to the same month in 2009. March 2010 consumer spending on credit cards is 10% up on March 2009 figures.

“Last year was a tough year for consumers and business, especially small businesses which are South Africa’s biggest employers. But December saw a marked rise in spending particularly on debit cards which had seen slow spending all year and then moved up 2,5 percentage points in December, only to slump by almost four percent in January. Spending on debit cards has since crawled back to October and November rates.”

He said the December rise in spending on debit cards was probably with consumers using bonuses and therefore better able to use a cash based system; but by January they were back to using credit.

Credit card use monitored by SureSwipe in December dropped to two percentage points less than the spending levels in October and November (which were similar), then rose by three percentage points in January, one percent above October and November figures, and have since settled to the same levels as those in October and November.

“What is heartening,” Kent said, “is that we saw as many transactions in March as in December – the peak shopping time of the year. Consumers appear far more confident and are back in the stores shopping – the only difference now is that they are more likely to bargain, ask for discounts or spend marginally less per transaction than last year.

“The good news for the economy and small businesses and retailers in particular though, is that consumers are back in the stores. If this trend continues or is even buoyed by World Cup spending, it will prevent further business failures in the small and medium enterprise sector, strengthen retailers and slow or halt further job losses.”

Kent pointed out that this sunnier economic picture echoed similar positive movement within major international economies: “the United States saw economic growth of 3,2% in the first quarter of this year on the back of increased consumer spending. In the US and here, consumer shopping makes up more than 70 percent of the total economy. When consumers stop spending then manufacturing goes into decline and job loss rises. No economy can afford that and in South Africa we have been helped by banks slightly releasing last year’s very tight grip on credit.”

In other positive news for South Africa late last week, Japanese rating agency, Ratings and Investment Information Inc. (R and I) affirmed South Africa's foreign currency issuer rating of A- and domestic currency issuer rating at A, and changed the outlook on both ratings to stable from negative. This is accompanied by SA National Treasury predictions that South Africa's economy is set to grow at 2.3 percent this year rising to 3.2 percent in 2011.

The R and I rating is particularly important given that its stance on SA has been negative since October 2008. In reviewing its position R and I noted the steady capital inflows to the country even as the global financial environment undergoes significant adjustments, the maintenance and continuity of macroeconomic management through changes of political leadership, and its belief that South Africa can sufficiently achieve its projected fiscal deficit reduction plan.

“After a very tough 18 months, especially for SMME’s and retailers hope is again entering the picture, underpinned by increasingly good economic data,” Kent said. “We are confident that this ongoing growth will steadily continue.”


Online Foreign Exchange
Foreign Exchange


Fax 2 Email



Online Casino


Shop Online

Study IT
Study IT Online

Web design
Web Design


Work from Home
Company News


© 2020 All rights reserved.

Daily Newsletter Subscription


Subscribe to the Gauteng Business News Daily News and information email (it's free).

Thank You
Your email address has been added.

Email Address: