Cost of living crisis in South Africa transforms daily life due to rising food and fuel prices

As part of Savings Month, South Africans are not just cutting back on expenses but are fundamentally changing their approach to purchasing. South Africa's economic problems, including prolonged weak economic growth, persistently high unemployment, tightening family budgets, and rising cost of living, have transformed the process of acquiring food products. These changes have become widespread in the retail sector and are deeply rooted in SPAR stores, where shopping has become more targeted.

Consumers continue to spend money, but they have become much more focused on exactly how their earnings are being spent. Today, consumers carefully examine every item in the basket, and their choices reflect efforts to balance family needs with the rising cost of living. Experts believe that given SPAR's scale as one of the largest independent food retail chains, it has a unique perspective on how the country's economic pressure is changing consumer behavior.

These changes, driven primarily by necessity, may become entrenched and establish themselves as sustainable habits for years to come, shaping the future of retail trade. One fundamental shift is the move from large monthly bulk purchases to weekly store visits and other strategies that align with cash flow, minimize unnecessary purchases, and reduce food waste.

This shift in consumer behavior is complemented by planning, which has become one of the most effective ways to save money. More households create weekly meal plans before visiting the store, build shopping lists around these meals, utilize promotions and discounts, and purchase only what is necessary. Instead of making decisions in the store, many shoppers determine their needs before leaving home and strictly adhere to this list.

A key element is the concept of 'value'. Customers are comparing prices more closely, looking beyond familiar brands, and evaluating sales, private-label products, and multi-buy offers. Beyond price, buyers consider quality, nutritional value, freshness, and product versatility. An item that lasts longer, reduces waste, or can be used in various dishes is perceived as having greater value.

Figures confirm this trend: recent studies show that 84% of shoppers actively seek out special offers, and 83% regularly use discounts, promotions, and coupons. Loyalty programs have also gained significant importance, as many consumers choose where to shop based on the ability to earn and use rewards that help stretch their budget.

For SPAR, it is clear that consumer loyalty will increasingly depend on how effectively retailers help customers make smarter purchasing decisions through significant promotions, high-quality private-label products such as the SPAR private label range based on the promise of 'as good as the best, but cheaper', reliable fresh produce, transparent pricing, and rewards that provide tangible savings.

Convenience is also closely linked to accessibility. For many South Africans, the true cost of shopping extends beyond the price at the checkout, as costs for fuel, public transport, and the time required to travel to shopping centers place additional pressure on low-budget households. Therefore, community-focused retail is becoming increasingly relevant. Stores located closer to people's residences facilitate frequent shopping, allow for the purchase of only what is needed, and avoid the financial burden of large, infrequent trips to the store. In the current economic climate, convenience is not just about saving time, but also about saving money.

Technology is accelerating this evolution. Shoppers are adopting digital grocery shopping through online catalogs, personalized app offers, loyalty programs, and delivery services like SPAR2U, which provide better visibility of prices and special offers, enabling more informed purchasing and managing household budgets with greater confidence.

One of the most important lessons for retailers in recent years has been that accessibility and trust are now inseparable, as consumers are becoming more demanding than ever. Winning customer loyalty requires retailers to maintain consistent standards of quality and pricing. Customers will frequently visit stores where they feel the owner is helping them make better decisions. The opportunity lies in meeting the expectations of modern, discerning customers through reliability and transparency.

Achieving this requires retailers to recognize that changing consumer behavior implies focusing on making value more visible and accessible to shoppers. Tools for this range from hyper-relevant promotions to high-quality private-label ranges and practical solutions for menus and baskets. The goal is no longer just to sell more goods, but to help customers achieve more with their budgets.

Savings Month serves as an important reminder that financial stability is built on thousands of daily decisions, many of which are made in the grocery aisles, when creating family meal plans, and at the checkout counters. Retailers who understand these changing trends have the opportunity to do more than just meet evolving customer needs. They can play a significant role in helping South African households navigate economic uncertainty and ensure that every rand counts. This is the commitment realized by SPAR stores across the country, in every community, every day. Beyond providing value, our independently owned stores remain deeply engaged in the communities they serve, supporting local initiatives and helping to strengthen the communities that support us.

South Africans are becoming accustomed to the term 'gas shortage' amid increased pressure to take measures ahead of the expected gas deficit. A significant portion of the gas consumed is imported from southern Mozambique, coming from the Pande-Temane fields via the pipeline operated by Republic of Mozambique Pipeline Investments Company (Rompco) into the Mpumalanga province of South Africa.

Strategic importance of natural gas

Gas holds strategic importance as it is not merely another fuel in the energy balance. Although natural gas accounts for only about 2.5% of South Africa's total energy supply, its role is critical. Approximately 35–40% of the gas from Pande-Temane is used at Sasol facilities in Secunda, where the South African chemical and energy company converts coal and natural gas into synthetic fuel and chemical raw materials.

Another 35–40% is directed to the Sasolburg chemical complex, where natural gas is used in production processes for chemicals such as wax, methanol, and ammonia. The remainder is distributed among industrial and commercial consumers. Furthermore, Sasol annually sells about 20–23 petajoules of methane gas to clients in South Africa, including steel, sugar, paper, and motor manufacturers.

Risks to industry and economy

Thus, the 'gas shortage' should be viewed not only as an energy supply problem but also as a risk to industrial policy, food security, and production competitiveness. Globally, natural gas provides about 70% of ammonia production and 55–65% of methanol production; ammonia is essential for fertilizers, and fertilizers are necessary for food production. Methanol serves as a basis for the chemical industry. In the context of South Africa, gas also supports the operation of furnaces, kilns, boilers, and technological plants in sectors such as metallurgy, glassmaking, ceramics, brewing, and synthetic fuel production.

A reduction in gas supplies will require more than just a change of fuel. Affected companies may have to redesign production processes, install new storage and processing systems, accept higher operating costs, and, in some cases, switch to alternatives with higher emission levels.

Consequences for jobs and needs

According to estimates by the South African Industrial Gas Users Association, alternatives such as liquefied petroleum gas (LPG), diesel, or electricity could cost two to five times more than the current price of gas, excluding capital expenditure for retrofitting. The consequences for industry and employment are considerable: industries dependent on this gas supply directly provide jobs for approximately 70,000–100,000 people. Sasol's broader contribution to the South African economy is even greater: in 2021, its contribution was estimated at about 5% of GDP, supporting around 500,000 direct and indirect jobs.

The country may require 300–400 petajoules of gas per year, equivalent to 6–8 million tonnes of liquefied natural gas (LNG), to meet industrial heating and power generation needs. Consequently, current supplies are insufficient. In this situation, procrastination is not a passive stance, as it increases the risk of price hikes, industrial weakening, and heightened energy insecurity.

Necessary steps and plans

A policy framework and infrastructure are being developed for gas imports. The publication of the draft Gas Management Plan points to Richards Bay in South Africa as a key LNG import location, while Matola in Mozambique is considered a regional supply source. Projects for terminals in both locations have passed the permitting stage, and procurement negotiations are underway. However, each of these initiatives requires several years of work, while the gap between the country's current state and the required level is constantly narrowing. The 'gas shortage' is only a few years away, leaving little time for further delays.

The primary and most urgent option is LNG import. A study conducted by the independent non-profit economic research institute Trade and Industry Policy Strategies (TIPS) in March 2026 clearly shows that South Africa must secure LNG imports in the short and medium term. While domestic resources may help later, they are incapable of closing the short-term gap.

The LNG strategy must be practical, not symbolic. The ports of Durban and Richards Bay, two major commercial ports in South Africa (in KwaZulu-Natal), can serve as LNG import terminals, but the existing pipeline infrastructure is insufficient to meet domestic demand. Therefore, South Africa needs a second import route through Mozambique, via the ports of Matola or Inhasso, to connect to the existing infrastructure serving the eastern interior of the country. Matola is at a more advanced stage, having received permits and environmental approvals.

The report's priority is a two-terminal strategy: one LNG terminal in Mozambique for access to Rompco and the domestic gas market, and a second in KwaZulu-Natal to serve the electricity and industrial demand in KwaZulu-Natal. Both must be secured and commissioned by mid-2030. Regional and domestic gas sources remain important but are not an immediate salvation. Timelines, costs, distance to infrastructure, and regulatory delays mean that current domestic resources cannot save South Africa before the crisis hits.

Demand-side and policy measures

Demand-side measures are also important. Some users may switch to LPG, diesel, electricity, transported LNG, or compressed natural gas (CNG). Biomethane, green hydrogen, and electrification can help over time. However, the report is realistic: many alternatives are expensive, technically immature, logistically complex, or have higher emissions. South Africa's effective carbon tax, which rises from R35/tonne ($2 USD) in 2024 to R115/tonne ($7 USD) in 2030, alone will not force mass substitution.

South Africa needs a credible gas plan linked to procurement, infrastructure, and industrial policy. The draft Gas Management Plan for South Africa has already outlined the scale of potential future demand: about 400 petajoules per year inland by 2050 and another 350 PJ per year in coastal areas. Now, this planning must move into execution.

The Department of Mineral Resources and Energy, regulators, state-owned companies, and private investors must develop a clear LNG-to-power strategy. It must define how much gas the country will need, who will buy it, how it will be priced and stored, and how supplies can be regulated based on changing demand.

The regulatory system also needs reform. The TIPS report calls for clearer rules regarding what assessments companies must conduct before obtaining environmental approval for offshore oil and gas projects. It also proposes creating a specialized tribunal to resolve disputes over these permits. Broader environmental assessments can help identify suitable areas for development. Maritime spatial planning is also required to manage the competing use of South Africa's ocean space.

These points are not bureaucratic footnotes; they determine whether investment comes before or after the crisis. First and foremost, South Africa needs coordination. The report calls for the creation of a dedicated delivery structure. This could be a new workflow similar to Operation Vulindlela—a government initiative aimed at modernizing the country's electricity, water, transport, and digital communication networks. Or it could be a Rompco-style mechanism, uniting the state and private sector under the coordination of a single gas aggregator.

A critical analysis of the required policy, regulation, procurement, infrastructure, and resource development shows that decisions must be made in the next few years to avoid a gas supply deficit after 2030. Many of these actions have long development and construction timelines and are highly interdependent. Delays in permitting, approval processes, LNG procurement, terminal development, or domestic gas projects can significantly affect South Africa's ability to secure alternative gas supplies before existing reserves decline. Therefore, early action is necessary to ensure that import infrastructure and production capacity are ready in time to support future gas demand and maintain energy security after 2030. The call to action is simple: decide now, procure now, permit now, build now. The crisis will not wait for the next plan.

July is observed as National Savings Month, yet for a significant portion of South Africans, the idea of setting aside funds for the future is increasingly viewed as a luxury rather than an achievable financial goal.

Challenges of financial planning

Recent studies indicate that the primary issue is not a lack of financial discipline, but the growing pressure households face just to cover monthly expenses. When a family is forced to choose monthly between groceries, fuel, electricity, and other necessary expenditures, saving money often takes a backseat. South Africans are not necessarily undersaving due to unwillingness; often, they simply do not have the same financial cushion they had a few years ago.

According to TransUnion's Consumer Pulse Report for the second quarter, inflation remains the main financial concern for 79% of the South African population. Furthermore, nearly a quarter of consumers expect to miss at least one bill or loan payment in the coming months. This data confirms that many families no longer have surplus income, as even salary increases are quickly absorbed by the rising cost of living. Mortgage payments, electricity bills, municipal tariffs, medical expenses, insurance, fuel, and food consume an increasing share of the family budget.

Household financial status

Data from the South African Reserve Bank shows that households frequently spend more than they earn, and this trend is exacerbated by the rising cost of living and debt burden. In some cases, consumers are forced to rely on credit and savings just to make ends meet because their income is insufficient.

This serves as a warning: when people lack financial reserves, even a relatively small unexpected expense, such as car repairs or a medical bill, can lead to debt. Nevertheless, National Savings Month provides an important opportunity to rethink financial security.

Principles of building financial resilience

When considering savings, people often focus on retirement or large investments. However, the priority should be financial stability. Building an emergency fund is perhaps the most crucial form of savings a household can establish.

There is a common misconception that one should wait until 'enough' money has accumulated before starting to save. In reality, consistency is far more important than the amount. Even small monthly contributions help build healthy financial habits. The value of time also cannot be underestimated: many focus only on the total savings amount, whereas the timing of when savings begin has a much greater impact on long-term financial outcomes.

National Savings Month should not cause guilt among South Africans regarding their habits. The reality is that many households are already under immense financial pressure. The most important thing is to take control of the situation. This starts with creating a realistic budget and a clear plan for both short-term and long-term financial goals. Financial security is rarely achieved through a single major decision.

Practical saving tips

Many try to save what is left at the end of the month, but in practice, such leftovers almost never exist. It is much more effective to treat savings like any other fixed monthly expense and automatically transfer that amount at the beginning of the month. After all, mortgage, car loan, and insurance payments are made first. Your future financial security deserves the same priority.

Saving is not just about cutting expenses; it is also about finding ways to increase income where possible. Many South Africans supplement their earnings through freelancing, online services, consulting, or starting a small business. Even a relatively modest additional income that is regularly saved or invested can significantly improve a household's financial stability over time.