Tightening the Belt: What South African Households Are Cutting First
Rising living costs are forcing South African households to pull back on restaurants and takeaways, streaming subscriptions and even healthcare. Research from NielsenIQ (NIQ) and TransUnion shows consumers are cautious, and many are making trade-offs to protect essential spending.
How households are feeling
NIQ’s Consumer Outlook: Guide to 2026 found a mixed picture. While 64% of South Africans surveyed expected their household finances to improve by the start of 2026, 37% said they were worse off than a year earlier, up from 33% in the previous survey. The share saying they were better off fell from 42% to 38%.
The reasons they gave:
- Higher cost of living: 70%
- Economic slowdown: 41%
- Job insecurity: 38%
NIQ South Africa managing director Zak Haeri said that although inflation has abated and there are some green shoots in the economy, consumers are still spending cautiously. Many households have cut spending “to the bone” and have little tolerance for more price increases, so retailers and manufacturers will need to focus on growing volumes and market share.
What’s being cut first
Eating out and entertainment
- 45% are cutting food delivery and takeaways
- 43% are reducing dining out
- 43% are cutting back on movies, concerts and other social outings
At the shops
- 43% are removing ready-to-eat meals from their baskets
- 42% are cutting non-essential groceries such as snacks, sweets and confectionery
Appliances and technology
- 40% are delaying small-appliance purchases
- 38% are postponing major appliances
- Many are delaying technology upgrades, such as phone contracts
Streaming: subscription cycling and DStv downgrades
TransUnion’s Q2 2026 Consumer Pulse Study found that 28% of consumers had cancelled subscriptions or memberships, and 24% had reduced spending on digital services, including television, internet and wireless plans.
One trend is “subscription cycling”: signing up to a service like Netflix or Amazon Prime for a month to watch particular shows, cancelling, then moving to another platform. DStv customers are also looking at cheaper packages or alternatives such as free, ad-supported services and YouTube.
Healthcare: downgrading rather than cancelling
Healthcare is harder to cut, but the pressure shows. TransUnion found that 33% of South Africans planned to reduce spending on medical care and services. Households are mostly downgrading their medical aid rather than cancelling it, while some are delaying elective procedures, specialist consultations and other non-urgent treatment.
Switching brands and shops
Lané Klopper, Consumer Panel Services Lead at NIQ South Africa, said consumers are more willing to switch brands and retailers to save, and are more reactive to price increases and promotions than last year. Some brands are on promotion for as many as 40 weeks of the year, which weakens traditional brand loyalty.
Where people shop is changing too. Spaza shops and independent retailers can benefit because they’re often closer to customers and cut transport costs. As Klopper put it, if she can shop somewhere closer that costs less in transport, she’ll go there.
What this means
- For households: If you’re trimming costs, review subscriptions and consider downgrading a plan before cancelling cover outright. With medical aid, speak to your scheme or a broker about cheaper options so you stay protected.
- For businesses: Loyalty is fragile. Value, volume and convenience matter more than ever.
The bottom line
Even with inflation easing, South African households are still stretched. Discretionary spending goes first, then subscriptions, with healthcare being downgraded rather than dropped. Brands and retailers that offer genuine value and convenience are best placed to hold onto customers.
Source: NielsenIQ South Africa Consumer Outlook: Guide to 2026 and TransUnion Q2 2026 Consumer Pulse Study, as reported in the original article.
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