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Under-pressure consumers could mean a 'mediocre' Christmas season

20 December 2018 - 13:28 By SUTHENTIRA GOVENDER
Many South Africans will not be splurging on shopping this festive season, a new report suggests.
Many South Africans will not be splurging on shopping this festive season, a new report suggests.
Image: iStock

If consumer spending patterns during Black Friday are anything to go by, South African retailers are in for a mediocre Christmas shopping season.

A PricewaterhouseCoopers (PwC) report compiled by economists has found that while more South Africans participated in the Black Friday shopping spree this year than last, the average spend per customer dropped noticeably.

Retail management platform Vend reported that in-store retail spending in SA over the 2018 Black Friday shopping period decreased by 10% compared with last year, while volumes also saw a decrease of 2%. However, certain segments such as electronics, clothes and shoes received considerable sales.

According to the report, household expenditure increased in the third quarter, with the main contributors being food, beverages (alcoholic and non-alcoholic), furniture, household equipment and clothing.

"It remains to be seen whether the recovery in household spending is sustained and will boost the Christmas shopping sales," says the report.

"Alternatively, will festive sales this year see the same mixed outcome as Black Friday? For now, retailers are faced with a South African consumer who remains under pressure."

The report found that income levels and access to credit must be considered "as primarily influencers of sale participation".

"If Black Friday sales showed a decrease in popularity and spend, Christmas sales are likely to see similar outcomes unless stores (physical and online) display considerably higher price discounts," the report suggests.

"Overall, the signals sent by a disappointing Black Friday numbers and other related data suggest a mediocre outlook for Christmas retail sales."