Consumers in South Africa have become more attentive to prices and special offers as pressure on family budgets intensifies. The loyalty market covers retail chains, banks, insurance companies, and other consumer brands.
According to NielsenIQ (NIQ), the share of sales of fast-moving consumer goods (FMCG) made through promotions is growing. The study showed that consumers have become more receptive to both price increases and advertising offers compared to last year.
Despite this, overall consumer spending continues to rise: in the first half of 2026, South Africans spent R347.7 billion on FMCG products. Sales volume increased by 7.7%, while the cost of sales grew by 5.5% compared to the same period last year.
However, buyers are becoming more selective about where their money goes. Zach Haeri, Managing Director of NIQ in South Africa, noted that 'the theme of the first half of the year was the consumer, who continued to become more cautious and budget-conscious.'
Haeri also pointed out that retailers face a dilemma as consumers become accustomed to promotions. He stated that manufacturers and retailers in the FMCG sector must solve the problem of strategically using promotional activities so as not to train buyers to wait for discounts before purchasing.
The Search for Value
The drive to achieve maximum value is reflected in the significant growth of loyalty programs in South Africa. A study conducted by Truth & BrandMapp found that in 2024, 82% of South Africa's economically active population used loyalty programs, with the average consumer belonging to 10.3 such programs, compared to only 3.6 a decade ago.
According to the 'South African Loyalty White Paper 2024/5', cashback became the most popular loyalty benefit across all income groups, genders, and generations.
Among the loyalty programs used by economically active consumers, Clicks ClubCard led, followed by Checkers Xtra Savings, Pick n Pay Smart Shopper, Dis-Chem Benefit, and Woolworths WRewards.
Money is King
The study also showed that consumers are increasingly using cashback to purchase essential goods. Dr. Melanie Van Rooi, Marketing Director at Clicks Group, told researchers that program members redeem cashback 'as currency for financial survival,' noting an unprecedented level of usage of this feature. She added that participants spend accumulated funds not only on luxury items but also on basic goods such as soap and toilet paper.
The loyalty market includes retail chains, banks, insurance companies, and other consumer brands. In addition to Clicks ClubCard, major programs include Checkers Xtra Savings, Pick n Pay Smart Shopper, Dis-Chem Benefit, and Woolworths WRewards. Furthermore, FNB eBucks, Capitec Live Better, and Discovery Vitality have expanded the competitive battle for rewards far beyond pharmacies and supermarkets.
KFC is one of the latest companies to join this race, launching a rewards program that differs from the traditional model of points or in-store discounts. Purchases through the app or in store kiosks grant access to rewards such as music festival tickets, gaming devices, sneaker releases, exclusive collaborations, and VIP meet-and-greets.
I Am VIP
Siyabulela Ngcukana, Director of Operations, Digital Technology, and Technology at KFC Africa, noted that consumers increasingly want rewards that reflect their broader interests. He believes that most loyalty programs view food choices separately from the rest of a person's life, which does not align with people's real lifestyles.
Ngcukana emphasized: 'You are not just a KFC customer. You are a gamer who also loves KFC, a fashion enthusiast ordering Zinger wings, or a music lover with nocturnal habits. True loyalty recognizes this.'
The program also allows sharing rewards with family and friends, and participants can choose to donate the value of selected rewards to the KFC Add Hope initiative.
This growing competition for consumers occurs against a backdrop where spending models are diverging between necessities and discretionary purchases. Although FMCG sales volumes grew in the first half of the year, NIQ reported that the technology and durable goods markets faced difficulties as consumers postponed product replacements. Sales costs in this sector decreased by 5.8%, and sales volume fell by 2.6%. Sales costs in the IT sector decreased by 10.7%, and small household appliances by 9.5%. NIQ noted that consumers are concentrating their spending on replacement and essential purchases, rather than lifestyle or convenience products. Haeri concluded that purchases are still being made where consumers see clear practical benefit and good value.