by Thinus Ferreira
As pummelled South African consumers cut back in a worsening economy, gym contracts and DStv are two of the big unnecessary expenses they're axing from their budgets and letting go of, according to latest market research.
As weary South African consumers who are subjected to a sliding rand, stubbornly high inflation and never-ending Eskom load-shedding are forced to cut expenses to make family budgets work, they are reassessing all different expense categories and doing away with unnecessary luxury discretionary spending like MultiChoice's DStv pay-TV service and gym contracts.
To get an idea of categories that have been most impacted, the South African research company TrendER/infoQuest surveyed 300 consumers during May, asking them which policies and contracts they have cancelled over the past six months.
According to the survey, household contents insurance has been the biggest loser with 10% of respondents claiming that they cancelled this
insurance over the past 6 months.
This is followed by funeral policies (9%) and
medical aid (9%). Younger consumers (aged 18–35 years) were more likely to
cancel household insurance and medical aid, while the 25 to 34 age group were more
likely to cancel funeral policies.
In terms of the entertainment/leisure categories, almost 1
in 4 respondents had cancelled their gym membership over the last six months,
while MultiChoice's DStv pay-TV service was also a casualty at 18%.
MultiChoice once again increased DStv prices from 1 April, with DStv Premium subscribers numbers that continue to fall. MultiChoice is set to announce its year-end results for the financial year until 31 March 2023 on 13 June, which might mirror the strain that South African consumers are experiencing.
"Unfortunately, the tough
economic conditions are resulting in some consumers cancelling their
precautionary savings products such as insurance, medical aid and funeral
policies," says Claire Heckrath, TrendER/infoQuest operational director.
"While it may be tempting to cancel personal insurance policies to
save money, it is important to recognise the potential risks and consequences.
It is crucial to carefully evaluate the potential risks, consult with
professionals and make informed decisions based on individual circumstances."
