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Understanding the Living Standards Measure Segmentation in South Africa


Global Agriculture Information Network

An overview of the Living Standards Measure (LSM)



Key Takeaways

1. Living Standards Measure (LSM) Segmentation:
South Africa employs the LSM marketing tool to divide the population into 10 groups. LSM 10 represents the highest living standard level, while LSM 1 is the lowest. The segmentation is based on living standards criteria such as urbanization, ownership of major appliances, and cars.

2. LSM Group Divisions:
LSM 1-4
: These individuals earn between R1,363 to R3,138 per month (approximately US $85 - $200).
LSM 5-7
: These individuals earn between R4,165 to R11,263 per month (approximately US $260 - $700).
LSM 8-10
: These individuals earn between R13,210 to R32,521 per month (approximately US $825 - $2,000).

3. Population: 
Statistics South Africa (StatsSA) estimated the 2020 mid-year population at 59.2 million. Gauteng Province has the largest population, representing 26.0% (15.5 million people), followed by Kwa-Zulu Natal with 19.3% (11.5 million people), and the Western Cape with 11.8% (7.0 million people). These three provinces account for 57.1% of the country's population.

4. History of LSMs:
The LSMs were developed by the South African Audience Research Foundation (SAARF) in the late 1980s. Originally, the 1989/90 SAARF reports included 13 key variables chosen from 71 characteristics to differentiate living standards. SAARF updates the LSM statistics annually.

5. Retailer Target Markets: Major South African retailers target specific LSM groups:

  1. Shoprite: Targets LSM 1 to 6.
  2. Pick n Pay: Targets LSM 1 to 8.
  3. Spar: Targets LSM 6 to 10.
  4. Woolworths: Targets LSM 6 to 10.
  5. Massmart (owned by Walmart): Covers all LSMs, including Cambridge foods targeting the lower end.

Breakdown of the Different LSMs:

LSM 1-4 (Least Access to Wealth)

LSM 5-7

LSM 8-10 (Most Access to Wealth)