According to data from the Bureau of Market Research (BMR), retailers could anticipate a substantial increase of approximately R7 billion. Last year, online sales constituted 15% of total sales, and this year, a considerable portion of sales is expected to occur online, as per the BMR’s findings.
A study conducted by the BMR on behalf of retailer finance provider Capital Connect reveals a projected rise in Black Friday spending from R19 billion in 2022 to R26.6 billion this year.
This is a contradicts the perception that Black Friday is primarily an American phenomenon. E-commerce platform Picodi highlights that sales on this day have surged by a staggering 2,000% compared to a typical shopping day. PricewaterhouseCoopers underlines the consumer-driven nature of South Africa’s economy, attributing nearly 64% of the country’s Gross Domestic Product (GDP) to private final consumption in 2022.
The role of the consumer wallet in boosting the economy, becomes important significantly influencing the strength of the retail sector. While BMR’s research suggests an expected increase in Black Friday spending, Professor Irrshad Kaseeram from the University of Zululand’s Economics Department offers a contrasting viewpoint. He notes that households, grappling with high interest payments, will experience a dip in spending power.
Kaseeram underscores the impact of the prime lending rate, which has risen from an average of 7.25% during the 2020/21 Covid-19 period to the current 11.75%. This rate is expected to persist at this level at least until June 2024, driven by elevated inflation, particularly in food and fuel prices. Kaseeram warns that engaging in hire purchase agreements during the Black Friday period and the lead-up to Christmas could lead to increased debt burdens and a surge in applications for debt counselling.