The Absa Merchant Spend Analytics Report for Q1 2025 highlights a noticeable slowdown in card spending growth, despite signs of broader economic recovery.
Card spending rose 7% and transaction volumes 10% year-on-year, down from 9% and 12% respectively in Q1 2024.
The report points to a more cautious consumer mindset, with the average value per transaction falling 3% year-on-year. South Africans are still spending, but are making more deliberate purchasing decisions.
Supporting this trend, NielsenIQ’s Mid-Year Consumer Outlook notes that 40% of shoppers now frequent discount or lower-priced stores.
“The Q1 data reveals that the consumer is not necessarily spending less, they’re making smarter purchasing decisions. This shift signals a clear directive for businesses which is to adapt to the value-based approach by offering competitive pricing, flexible purchase options, and meaningful loyalty strategies to stay relevant and resilient in a price-conscious market,” said Isana Cordier, head: Consumer Sector, Absa CIB.
Notably, the strongest growth came from outside the traditional top 10 spend categories.
Warehousing and storage led category growth in Q1, up as much as 92%, ‘likely linked to the ongoing trends of immigration and semigration across the country’.
Education, at 30%, followed, aligning with the back-to-school season, while online gambling remained in the top five, driven by digital platforms. In contrast, print media showed flat growth and physical books and newspapers continued to decline, signaling an ongoing shift toward digital content.
Within core categories, growth was modest. Small increases in home and garden, as well as health and beauty, indicate continued consumer investment in comfort and wellness, even under financial strain.
Online shopping continues to outpace traditional retail. Online card spend rose from 7% of total spend in Q1 2022 to 10% in Q1 2025, reflecting greater trust and digital adoption – especially among Gen Z consumers.
While in-store transactions still dominate, they are gradually declining, said Absa.
Online spending surged in sectors previously dominated by cash. Commercial and industrial services led with a 155% year-on-year increase. Funeral services and education also showed strong online growth, though from smaller bases.
Card Spending

Everyday essentials continue to anchor online spend, the report found. Categories like home and garden (23%) and food (20%) remain the largest contributors to e-commerce volumes, underscoring their role in frequent, practical purchases.
Consumer reliance on credit is growing, said Absa. Credit card usage rose 9% in Q1, down slightly from 12% in Q1 2024, while debit card growth slowed to 5%, from 8% a year earlier.
This trend may reflect greater dependence on credit to manage rising costs and tight budgets, the lender said.
“As consumer priorities shift, businesses must adapt to changing behaviours, focusing on value, digital enablement and the evolving needs of the modern shopper,” Cordier said.