Consumer market outlook reveals cautious optimism in South Africa

The Bureau for Market Research (BMR) has remained cautiously optimistic about the consumer landscape in South Africa over the next three years.

This is according to the BMR's latest flagship study, titled Consumer Market Outlook for 2025 to 2027, which delivered critical insights into evolving consumer sentiment and spending habits shaped by macroeconomic influences in South Africa.

Authored by Dr Requier Wait, chief researcher at the BMR, the report examines how changing economic and policy conditions are poised to impact consumer behaviour over the next three years.

The BMR projected that modest growth in real household consumption, underpinned by wage increases and easing inflation, will battle against high household debt and a heavier burden of personal income tax.

The report forecasts a 2% rise in retail sales in real terms for 2025, although a gradual slowdown is expected in the following years. Key sectors such as textiles and household goods are predicted to spearhead this recovery, while the phenomenon of Black Friday continues to emerge as a pivotal retail catalyst.

“Now more than ever, a clear understanding of the consumer landscape is essential,” said Dr Wait.

“South African consumers are navigating a complex environment marked by sluggish growth, global volatility, and rising financial pressures. This report is designed to equip businesses and policymakers with the foresight needed to adapt and lead in an increasingly uncertain environment.”

This comprehensive forecast explores how shifting economic and policy conditions are likely to shape consumer behaviourover the next three years. Drawing on both local and global trends, the study integrates policy uncertainty metrics, retail performance indicators, and broader macroeconomic signals.

Key themes illuminated by the report include: 

• Macroeconomic pressures: Lingering policy ambiguity and fiscal uncertainties weigh heavily on the national outlook as GDP growth remains subdued.
• Evolving retail dynamics: The shifting landscape of retail is increasingly characterised by events such as Black Friday, which play a crucial role in seasonal sales performance.
• Signs of sectoral recovery: Resilience is noted in specific sectors, particularly services and manufacturing, contributing to mild gains in employment and wage growth.
• Heightened consumer vulnerability: Persistently rising living costs, unchanged tax brackets amidst inflation, and soaring household debt are continually squeezing disposable income and spending potential.

Furthermore, the report identifies vital areas requiring adaptation from businesses and policymakers, particularly in response to the rapid advancement of generative AI, a shift towards sustainability, and ongoing digital disruption.

Dr Wait emphasised the necessity for “ambidextrous leadership” — the ability to balance operational efficiency and innovation.

“Those businesses that both exploit their current strengths and explore emergingopportunities, whether in AI, ESG practices or digital sales, are best positioned to thrivedespite market uncertainty,” Dr Wait said.

“We hope this report becomes a reference point for decision-makers. The consumer marketis not static, it reflects and amplifies every shift in policy, productivity and perception.”

BMR CEO, Professor Deon Tustin, said their latest release was intended to support business and government stakeholders in refining strategy, pricing and resource allocation decisions in a high-risk economic landscape.

“This report reflects the BMR’s commitment to delivering research that enables evidence-based decision-making,” Tustin said.

“In a period marked by volatility and transformation, access to clear, forward-looking insights is essential for shapingresilient business strategies and effective policy responses.”

BUSINESS REPORT