The data has been gathered, sorted, and analysed. And it all points to one glaring revelation: As the economy slumps South Africans are no longer in a frenzy over Black Friday shopping.
This is according to Stats SA’s latest Retail Sales data analysis report. The reports shows that retail sales continued a declining trend, falling by 0.9% year-on-year in November from a decline of 2.3% in the previous month.
Siphamandla Mkhwanazi, FNB Senior Economist, says that this points to the fact that consumers are facing challenges because their everyday expenses are making it harder for them to have extra money to spend.
Decrease in sales
Mkhwanazi says the overall decrease in sales was widespread, with only two out of seven categories of retail stores experiencing an increase in annual volumes.
General dealers and other retailers saw more sales over the November period but, on the other hand, clothing and footwear, hardware retailers, food retailers, and pharmaceuticals experienced a decrease in sales compared to the previous year.
Mkhwanazi explained that right now, people are not spending much because of a few reasons like high prices, high interest rates, and low confidence in the economy.
“The confidence of consumers during the holiday season was the lowest it’s been in over 20 years,” Mkhwanazi said.
Optimism around Black Friday last year was at an all-time high as economists at the Bureau of Market Research projected that South Africans were expected to increase their Black Friday spending by approximately R7 billion compared to the previous year, 2022.
E-commerce
Most optimistic, was the e-commerce sector, as PwC found that South African shoppers increased their online shopping in 2023. When it came to Black Friday spending though, the data shows that South Africans reined in the purse strings due to the hard economic landscape.
But, Mkhwanazi says, things might get a bit better in the medium to long term.
“Inflation is slowing down and more people are getting jobs. The government is also thinking about lowering interest rates, which could encourage people to spend more on non-essential things. So, we predict that in 2024, people will probably start spending a bit more than they did in 2023,” he concluded.
