At a busy Pretoria mall, shoppers pause at the checkout, eyeing the new price stickers on gasoline and diesel. The familiar sight of a R2-per-litre increase looming in October is a reminder that even as confidence ticks up, everyday costs are still climbing.
According to an emailed statement from FirstRand and the Bureau for Economic Research, the consumer confidence index, a quarterly measure of how households feel about their financial situation and the economy, rose to -13 for the three months to September, up from -19 in the previous quarter. The index, which runs from -100 (very negative) to +100 (very positive), still sits in negative territory, signalling that optimism is tentative.
What is driving the mixed picture?
The lift in sentiment coincided with a sharp jump in Brent crude oil prices, which surged from around $90 a barrel to above $100 after the conflict in Iran escalated. Higher oil prices translate into higher local pump prices for gasoline and diesel, eroding disposable income for many South Africans.
FNB chief economist Mamello Matikinca-Ngwenya warned that the South African Reserve Bank’s 25-basis-point rate increase in May, which took the policy rate to 7%, hits middle- and high-income earners hardest. Those groups tend to rely more on formal credit and spend more on big-ticket items such as appliances and cars, so a higher interest rate squeezes their budgets.
She also noted that low food inflation has provided a buffer for low-income households, keeping their grocery bills relatively stable. However, the same statement highlighted that confidence among high-income consumers, who hold the bulk of spending power, remains very low, a sign that the broader outlook is still fragile.
With the Reserve Bank set to announce its next policy decision on 23 September, analysts expect that fuel price volatility and the prospect of further rate moves will keep shoppers cautious. Retailers that focus on value-for-money offerings are likely to fare better than premium brands as consumers prioritise essentials over discretionary purchases ahead of the festive season.
For small and medium-sized retailers, the message is clear: tighten inventory to match tighter consumer wallets, and highlight price competitiveness in promotions. Those that can adapt quickly may capture market share from higher-priced competitors while the broader sentiment remains muted.
The FNB/BER Consumer Confidence Index has been published quarterly since 1982, giving analysts a long run of comparable data to judge whether a single quarter’s improvement, like this one, reflects a genuine shift in household sentiment or a short-lived reaction to a specific event such as a fuel-price move.
How the index compares across income bands
The FNB/BER survey breaks its results down by income group specifically because a single national confidence number can mask very different realities: low-income households, who spend a larger share of income on food and transport, respond most to changes in basic goods pricing, while higher-income households are more sensitive to interest rates and asset values. That breakdown is why FNB’s own commentary this quarter separated the improving headline figure from the still-depressed sentiment among higher earners, since the two groups are reacting to different economic levers moving in opposite directions at the same time.
Retailers watching this data closely tend to adjust promotional calendars around the Reserve Bank’s own announcement dates, since a rate decision either direction can shift consumer willingness to spend within days of being announced.
The next fuel price adjustment, due at the start of October, will be the first real test of whether this quarter’s confidence gain holds or reverses once pump prices actually change rather than being merely anticipated.
Businesses budgeting for the fourth quarter should treat this quarter’s improvement as tentative rather than a confirmed turning point.
