Disappointing Black Friday spending suggests an uncertain outlook for Christmas season shopping, according to the PwC strategy and analysis team.
While more South Africans participated in the Black Friday shopping event in 2018 compared to the preceding year, the average spend per consumer dropped noticeably, the economists said on Thursday.
"Not only did South Africans spend less per person, the sentiment on social media around the sales event was sceptical," they added.
Two in three South Africans participated in Black Friday in 2018, an increase from a 54% participation rate in 2017. From an online perspective, BankservAfrica counted over 400,000 sales transactions - a 55% increase compared to last year. Similarly, Cyber Monday sales transactions increased by 36% this year to 176,595. In parallel, transactions per minute increased considerably on both days, according to Black Friday Global Analysis.
In contrast, electronic funds transfer (EFT) transaction values decreased by 19%. Retail management platform Vend reported that in-store retail spending in South Africa over the 2018 Black Friday shopping period decreased by 10% compared to last year, while volumes also saw a decrease of 2%.
On social media, consumers shared their view that the Black Friday sales offered disappointing price discounts and underwhelming offerings. Instead of discounts of up to 80% experienced in the US, for example, South Africans were offered discounts averaging 20% in stores and online, said the PwC report.
Will it be a merry or mediocre Christmas for South African shoppers?
Disappointing Black Friday spending suggests an uncertain outlook for Christmas season shopping, according to the PwC strategy and analysis team.
While more South Africans participated in the Black Friday shopping event in 2018 compared to the preceding year, the average spend per consumer dropped noticeably, the economists said on Thursday.
"Not only did South Africans spend less per person, the sentiment on social media around the sales event was sceptical," they added.
Two in three South Africans participated in Black Friday in 2018, an increase from a 54% participation rate in 2017. From an online perspective, BankservAfrica counted over 400,000 sales transactions - a 55% increase compared to last year. Similarly, Cyber Monday sales transactions increased by 36% this year to 176,595. In parallel, transactions per minute increased considerably on both days, according to Black Friday Global Analysis.
In contrast, electronic funds transfer (EFT) transaction values decreased by 19%. Retail management platform Vend reported that in-store retail spending in South Africa over the 2018 Black Friday shopping period decreased by 10% compared to last year, while volumes also saw a decrease of 2%.
On social media, consumers shared their view that the Black Friday sales offered disappointing price discounts and underwhelming offerings. Instead of discounts of up to 80% experienced in the US, for example, South Africans were offered discounts averaging 20% in stores and online, said the PwC report.
StatsSA announced on December 4 that SA’s economy had exited the technical recession in the third quarter following gross domestic product (GDP) growth of 2.2% quarter-on-quarter.
Said PwC: "It remains to be seen whether the recovery in household spending is sustained and will boost Christmas shopping sales. For now, retailers are faced with a South African consumer who remains under pressure."
According to a survey by the Bureau for Economic Research, released on November 28, overall consumer sentiment decreased by 15 points from the second to the third quarters of the year, said PwC.
Furthermore, the household financial outlook dropped from 31 in the second quarter to 13 in third quarter. In parallel, inflation increased in October to 5.1% year-on-year from 4.9% in September, adding further strain to consumers’ purchasing power.
PwC noted: "Consumers have felt the pinch from continued petrol price hikes during 2018 leading to a record high price of R17.08/litre in November.
"Income levels and access to credit must be considered as primary 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."
According to the PwC analysis, "Overall, the signals sent by disappointing Black Friday numbers and other related data suggest a mediocre outlook for Christmas retail sales."