THE Spark cash index, which measures the average value of cash withdrawals across more than 2,000 ATMs in South Africa, fell 9.18% to R440.53 in January compared with December 2012.
Spark ATM Systems MD Marc Sternberg said on Thursday the decline indicated consumers had significantly reduced spending during the month, following an increase in cash withdrawals to a record R485.07 in December.
He said the steep drop in the withdrawal values during January was a recurring trend.
"Historically, following a surge in spending over the festive season, January is the month when consumers often adopt a more conservative spending approach, especially with mandatory expenses on the horizon such as school fees and related costs," he said.
"In addition, there is also the fact that many workers get paid early in December and are often faced with a ‘long’ month before they get paid again in January, during which they have to curb their spending activity."
Mr Sternberg said the average monthly cash withdrawal figures would regain positive momentum in late March.
"This is due to the Easter holiday period occurring earlier this year, which is historically synonymous with increased retail activity nationwide," he said.
The index revealed a significant year-on-year growth of 5.43% for January.
IHS Global Insights principal economist Ronel Oberholzer said this was a positive sign.
"Comparing with last year’s levels (2.65% year-on-year growth recorded in January 2012), consumers are currently in a better situation. However, I suspect that we will soon see a slowing in the rate of increase," she said.
Mr Sternberg said although consumers would remain cautious, the current stable interest rate environment would foster consumer spending and local retailers could still enjoy a positive trading environment this year.