While marketers in many countries are worried about a recession, there is also optimism regarding the business climate and marketing budgets.
Black Friday to provide a useful boost for SA’s struggling retailers
By our News Team | 2023
Consumers not replacing large appliances, but sales of small domestic appliances may enjoy an uptick. Clothing to show biggest gain.
The Bureau of Market Research, an independent market research entity within the University of South Africa (Unisa), has released new research which suggests that the Black Friday season is expected to create additional retail turnover of US$1,42-billion (R26.6-billion) for local South African retailers in 2023.
It will also create around 150 000 additional job opportunities across the economy, the study suggests. These will be mostly temporary or seasonal,
Photo by Karolina Grabowska from Pexels
The study was conducted by the Bureau of Market Research (BMR) behalf of Capital Connect, which specialises in business funding for retailers.
However, 2023 retail turnover is not expected to reach the heights of some earlier years, which were lifted by pent-up demand after the Covid-19 lockdowns. Forecasts for performance by retailers for the period between Sunday, 29 October and Sunday, 26 November are:
- General dealers: $500-million (R9.3-billion) gain.
- Food, beverages and tobacco: no significant gains.
- Pharmaceutical and medical goods: no significant gains.
- Textiles, clothing and footwear: $800-million (R15-billion) gain.
- Household furniture, appliances and equipment: $85-million (R1.6-billion) gain.
- Hardware, paint and glass: $37.7-million (R707-million) gain.
“Black Friday 2023 and the festive season provide a unique opportunity for savvy retailers to capitalise on increased consumer spending,” says Steven Heilbron, CEO of Capital Connect.
“Beyond this seasonal surge, the IMF’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.”
Black Friday has traditionally been an occasion for consumers to spoil themselves by splashing out on confectionaries, consumer electronics and white goods, according to the research.
But continuing the post-pandemic trend, the research anticipates that cash-strapped consumers will be seeking bargains on:
- Food staples.
- Household essentials.
- Hardware for urgent home repairs and maintenance.
Most consumers are holding off on replacing large appliances as long as possible, though sales of small domestic appliances may get a small uplift, the research shows.
As is traditional over the Black Friday period, retailers with a strong online presence are expected to benefit heavily from this promotional period. Instead of only visiting shops to seek Black Friday bargains, consumers are increasingly buying retail goods online.
“Black Friday sales are a central part of a shopping festival that spans from late October to late December,” says Professor 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.”
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