Environment

With South African consumer inflation and interest rates at historical lows, it was not surprising to see consumer spending accelerate during the 2010 calendar year, boosted by the economic activity around the 2010 FIFA World Cup. Consumers enjoyed record levels of product deflation, with Massmart statistics showing Food deflation peaking at 4% and General Merchandise deflation peaking at 10%.

The low levels of food inflation allowed consumers to take advantage of the improved economic conditions and increase their spend on semi-durable and durable products.

Nationally, consumer indebtedness has declined but not to the extent that one would expect given the recent benign economic environment.