South Africans are gearing up to spend a lot this Christmas
Big-spending South Africans are preparing for a cheerful festive season, according to a recent survey by Deloitte, which found that they were driven by optimism and financial security.
The year-end holiday season 2006 survey released on Friday showed that this year's festive season would see consumers spending 18,5 percent more than they did last year.
"The majority of consumers in South Africa are extremely optimistic concerning the economy from a 2007 perspective," the survey found. It added that South Africans believed their spending power had increased significantly when compared to that of last year.
Syd Vianello, retail analyst at Nedcor Securities, said: "Christmas shopping is crucial to South African retailers." He added that it was considered a normal retail trend that 25 percent of the retail industry's profits came from just these seven weeks in the year.
However, Vianello added that while the economy had shown signs of growth in the form of raised employment, there were signs of growth slowing down.
"We've got a tighter credit environment this year. I'm a little worried that rising interest rates, which generally kick in after six months, will affect the rate of growth in sales," Vianello said, adding that this year's growth would not be as high as last year.
The survey found that the local market was following international trends of encouraging shoppers earlier in the season with November sales.
"Consumers start their shopping in November because of the early commercial initiatives from retailers, a change compared with past studies," the survey reported, adding that the festive season had already begun.
In New York, the festive shopping season was officially opened on Friday which saw bargain-seeking shoppers flock into stores to take advantage of sales and fewer crowds.
According to the study, retailers had used loyalty programmes to prevent customers from going elsewhere during year-end shopping. The greatest concerns for how customers shopped were: avoiding crowded shopping centers; queuing and products not being available.
While the survey found that hypermarkets would be the most visited channel for Christmas shopping in the country, Vianello elaborated, saying this would not necessarily mean higher revenues for these stores.
The most money would be spent at speciality clothing shops according to the survey.