Stokvels a saving grace amid slow silly season

The massive collective buying power of grocery stokvels could be the saving grace for big food and wholesale retailers this festive season, as individual consumers are wary of spending after a tough year.

With the JSE's general retailers index down 12.91% year to date, grocery retailers are anticipating a slow Christmas as consumers struggle with higher inflation and limited discretionary income.

But stokvels are expected to boost their sales.

Annaleigh Vallie, group communication manager at Massmart, said on Wednesday that a Makro store could have up to 200 stokvel groups at any given stage on its books.

Each group could have between five to 50 members, while some stokvels have as many as 150 members.

"We cater to the groups. Purchases are rung up at separate till points, made available exclusively for stokvel members at collection time," said Vallie.

"When deliveries are made, trucks take the bulk purchases to a designated delivery area, where all the stokvel members gather and the goods are divided up for individuals," said Vallie.

Massmart said Witbank Cash & Carry had 125 societies with about 1,800 members each. This means each stokvel can spend about R200,000 on festive season shopping and on groceries between December and February.

Big stokvel groups place their orders up to six months in advance .

Pick n Pay entered into a partnership with the National Stokvel Association of South Africa to develop special grocery offerings for its members.

Chris Reed, group executive of franchise and hyper stores, said the retailer offered back 1% on stokvel purchases.

"Stokvel loyalty card members also receive discounts of up to 20% on our current promotion," said Reed.

Stokvel loyalty card members could earn instant savings at certain times of the year. "We also organise transport if it's within 15km of a store ," said Reed.

Popular stokvel products during the festive season include rice, cooking oil, milk, spices, fish, beef, fruit, vegetables and personal care items.

Bright Khumalo, a portfolio manager at Vestact, said: "Stokvel and grocery retailers accumulate the funds throughout the year; the ultimate goal is to buy food that will last them six to eight months ... sales spike and these guys tend to come in the first and second week of December to make these purchases."

He added that retailers such as Shoprite were likely to benefit the most as they were good "negotiators".

Other retailers such as Woolworths were likely to feel a pullback in consumer spending.

"The lower-end retailers will be the biggest beneficiaries," said Khumalo.

Reed said stokvels were an important part of growth for the group.

"Through these we gain a good understanding of what stokvels have on their shopping wish lists, and we tailor promotions accordingly."

tshandup@sundaytimes.co.za