As retailers ramp up their November shopping deals and discounts, this year’s Black Friday sales is expected to show some growth particularly among consumers seeking a bang for their buck under the mounting economic pressures.
“Last year’s Black Friday point-of-sale (PoS) and ATM data spend, tracked by BankservAfrica, amounted to R3,3-billion – or a 17% annual growth – and the volumes totalled 5,2-million in 2021 or a 10% improvement on the previous year’s figures,” says Martin Grunewald, chief business officer at BankservAfrica.
“We may see this year’s Black Friday play out differently as retailers offer promotions in new ways, and unlike previous years where Covid-19 and lockdown may have had an influence,” he adds.
However, as the economy buckles under multiple pressures of the steady rise in consumer inflation and with the headline CPI forecasted to average at 6,9% in 2022 – compared to 4,5% in 2021 – there has been a notable acceleration in the erosion of consumers’ purchasing power, according to independent economist, Elize Kruger.
A high-level analysis of the BankservAfrica PoS and ATM data suggests that growth in transaction volumes might be lower in 2022 compared to Black Friday 2021, as the volume and value of transactions have been moderating over the past three months, reflecting strain in the economy.
In addition, the growth in average salaries, measured by the monthly BankservAfrica Take-home Pay Index, has been lagging on inflation, both in nominal and real terms. On top of that and to help stem the tide of rising prices, the South African Reserve Bank has increased interest rates by a cumulative 275bp since November 2021, putting further strain on consumers with debt exposure.
However, with Black Friday recognised as an annual shopping day, positive sales growth is expected.
“In this tough consumer environment, consumers tend to typically become more price sensitive, tracking specials carefully and choosing to spend more on lower priced items that are within their spending limits,” says Kruger.
“Some consumers may choose to take advantage of the Black Friday bargains and stock up for the festive season. We could see groceries and necessities topping the list and less demand for durables and more expensive items in light of the difficult economic environment.”