As usual for this time of year, we’re asking retailers to give us your thoughts on how well (or not) your December and January trading went. The more who respond, the better we can understand the market and give a more accurate report. If you haven’t yet taken part, please complete our survey here (it’ll only take about 5 minutes and you can remain anonymous).
Black Friday and schools opening later have had a big impact on the holiday trading period, especially in December. So far, 47% of retail respondents report that their sales were roughly the same or up to 10% more, compared to December 2018, which was already bad for retail. A fifth of the retail respondents to our survey last year said their sales then were down by 20% or more from the 2017 December trading period.
This year, only 9% report an increase of 10% or more – and only 3% of respondents increased their December sales by 20% or more. On the other hand, 16% indicated that they are down by 20% or more, compared to December 2018.
The January back-to-school trading was more reassuring to retailers, with 72% reporting their sales were roughly the same or more compared to the prior year.
One contributing factor would be that this year schools opened slightly later than usual, which would have led to consumers spending less on back-to-school items in December and more in January compared to the 2018/19 period.
Black Friday woes
Additionally, local consumers swarming to stores in November for Black Friday deals leave them with less disposable income for December purchases.
For smaller retailers, especially those on the coast that rely on the December holiday sales, this is a big problem. “Black Friday has never had a positive impact on our stores,” says Yvette Jackson of Village Vibe surfstore. “Coastal retail businesses are suffering as they basically only have once a year to make money to keep them afloat for the rest of the year. When people come on holiday over December they only buy the bare necessities now.
“We are not feeling very positive this year. We are down by about R200 000 for the year.”
Over half (56%) of respondents say that consumers did all of their Christmas shopping during this discount time, which affected their December trading.
“All Black Friday has done is kill trade for November, December and January as far as we are concerned,” laments Duncan Bloom of Nevills. “Everyone waits for Black Friday specials and spend on unnecessary items as the euphoria of Black Friday tends to distort what a good bargain is, which inevitably eats into spendable budgets for future purchases.”
There was “very little turnover from sub R1 000 items in December,” adds another respondent, who wished to remain anonymous. “These were all purchased on Black Friday.”
On the other hand, a third of respondents indicated that Black Friday had no significant effect on their December sales, and 12% found that it helped them to clear old stock and it even attracted new customers to their stores.
Only a quarter of respondents didn’t take part in Black Friday sales. Of those who did, 70% offered discounts of more than 20% off.
Consequences of loadshedding
When it comes to loadshedding, it wasn’t always a case of lights out as 69% of respondents say they have generators and could keep operating as normal. There was a different problem however: during loadshedding hours customers just stay away from business areas, Mohmed Kazi of Rite Value Fashion & Style points out.
“We have invested in our own power to keep us going, but there is a noticeable drop in trade during loadshedding,” agrees Jeremy Hare of Great White Sport & Surf.
Not all retailers are lucky enough to have generators, however. With no power their systems go down and 6% indicate they even have to close their stores during this time.
Additionally, 9% indicated that they have to implement more non-electronic security measures for when the power’s out.
Another problem that retailers experience with loadshedding is that their orders can get delayed when their suppliers get loadshedded.
Feelings about 2020
Responding retailers aren’t very hopeful that trading will get better in 2020, compared to the past year. Just over half (53%) think that the economy will remain weak and that consumers won’t have much money to spend, and 19% don’t expect much to change this year.
There are a few cautiously optimistic ones, however: 22% indicated that they are optimistic that good things will happen in 2020, and 3% said that their 2019 was so bad that things can only improve this year.
At the end of the day, we are very much bound to what’s said in the public sphere by people deemed important by the economic markets. As one anonymous retailer says: it all “depends on what stupid comments the government make”.
With President Ramaphosa promising to work on employment and developing skills, we can but hope that more money will enter the market this year, leading to more sales at retail level.