The Bureau of Market Research (BMR) has predicted a bigger Black Friday period in South Africa than last year despite tepid economic growth.
A new report by the BMR predicts that Black Friday will add R26.6-billion to the retail sector this year, despite the economic headwinds, the impact of load shedding, decreased consumer spending throughout the year and higher-than-usual inflation.
The report, commissioned by Capital Connect, a fintech, suggests that shifts in consumer psychology will see Black Friday benefit general dealers the most, while food, beverage, tobacco, pharmaceutical and medical goods will see no significant gains over last year.
“Black Friday 2023 and the festive season provide a unique opportunity for savvy retailers to capitalise on increased consumer spending,” said Capital Connect CEO Steven Heilbron. “Beyond this seasonal surge, the International Monetary Fund’s revised economic outlook for 2023 indicates that South Africa’s GDP growth may come in at a higher-than-expected 0.9%. This indicates slight improvements to market conditions for retailers.”
Heilbron said retailers must be savvy in their approach if they are to benefit from Black Friday, which has expanded from a single shopping day to a month-long event, this year running from 29 October to 26 November.
BMR researchers found that retailers with niche product offerings have had to diversify to survive a low-growth environment. The company said general dealers are likely to get the lion’s share of consumers’ spending this Black Friday.
Trends in consumer behaviour observed in previous years are expected to continue.
Black Friday bargain hunting
The tough economic environment, coupled with high levels of unemployment, mean, however, that for many South Africans, Black Friday is not so much an opportunity to buy luxury items on sale, but about bargain-hunting for essentials. BMR predicts that the top-selling products will include necessities such as chicken, fruit, vegetables, milk, sugar, cooking oil and toilet paper.
“Cheaper, non-branded clothing, especially children’s clothing, women’s clothing, underwear, shoes and clothing accessories will sell well. Small domestic appliances like two-plate stoves and kettles will also be good sellers,” it said.
Retailers with a strong online presence stand to gain significantly from the Black Friday period, with online channels facilitating a larger portion of total sales volumes each year.
“Black Friday sales are a central part of a shopping festival that can span from late October to late December,” said Carel van Aardt, research director at the BMR. “But the sales profile of Black Friday differs from the festive season, thus creating opportunities for savvy retailers to capitalise on revenue opportunities by adjusting to shifting consumer demand. Higher earnings during this important season will help retailers to compensate for depressed consumer spending throughout the year.” — © 2023 NewsCentral Media
