Conventional wisdom suggests that winter is typically a slow period for retail trading in South Africa. However, a comprehensive big data analysis commissioned by Capital Connect, a fintech providing rapid and flexible business funding to South African retailers, reveals a different trend: retail sales often increase during the winter months following a quiet autumn.
The study indicates that retailers can capitalize on winter sales by stocking up on pharmaceutical goods, winter clothing, and specific food and beverages. The breakdown of retail subsector performance for winter 2024 is as follows:
General dealers historically see an uptick in sales during winter compared to earlier in the year. They benefit from customers purchasing:
- Hot beverages like coffee, tea, and hot chocolate
- Vegetables and meats for soups and stews
- Winter clothing such as sleepwear and children’s warm clothes
- Blankets and fleeces
- Cold and flu medications, over-the-counter treatments, vitamins, and immune boosters
- Small appliances like heaters and toasters
- Food, Beverage, and Tobacco Stores
These specialized stores also typically experience growth in winter, benefiting from the sale of ingredients for hot beverages and nutritious winter meals.
Pharmaceutical and Medical Goods Stores
These stores profit significantly during the cold and flu season. Popular items include:
- Prescription medicines
- Cold and flu remedies
- Throat lozenges, skin creams, moisturizers, cough syrup, pain relievers, nasal spray, and immune boosters
- Clinic services and hair dryers
- Textiles, Clothing, Footwear, and Leather Goods Stores
While these stores tend to underperform in winter compared to other times of the year, they still see increased sales in:
- Thick socks, winter boots, hoodies, jerseys, sweatshirts, thick trousers, long sleeve shirts, slippers, warm sleepwear, and children’s winter clothing
- However, local retailers are facing stiff competition from international brands.
- Household Furniture, Appliances, and Equipment Stores
These stores see little growth in winter compared to the first quarter. However, there are opportunities to drive sales of:
- Heaters, carpets, cookers, ovens, hair dryers, vacuum cleaners, small kitchen appliances, toasters, grills, roasters, and coffee machines
- Hardware, Paint, and Glass Stores
These stores generally experience low growth in winter. Notable winter sellers include:
- Firewood, heaters, grillers, and some DIY products
Steven Heilbron, CEO of Capital Connect, emphasizes the importance of retailers maximizing opportunities during all seasons, even those traditionally seen as quieter. He suggests that innovation is key to capturing market share during the winter months when there are fewer holidays and people tend to stay indoors.
Heilbron proposes several creative strategies for retailers to boost winter sales:
- Host Winter-Themed Events: Organize cooking classes for winter recipes or wine tastings featuring robust red wines to enhance supermarket and liquor sales.
- Develop Winter Promotions: Offer attractive deals on seasonal essentials like winter woollies and soup mixes.
- Create Bundles: Increase basket sizes by bundling items such as soup ingredients or flu-fighting kits.
- Offer a Warm Refuge: Create inviting spaces for customers to linger by providing soups, hot chocolate, and a cosy atmosphere in coffee shops or bistros.
Heilbron adds, “Retailers looking to invest in winter advertising, bulk purchases, new channels, or store renovations need fast, reliable financing to seize these golden opportunities. With Capital Connect, they can apply for unsecured short-term capital up to R5 million through our app, with funds available in their bank accounts within 24 hours.”
This strategic approach, coupled with innovative promotions and timely financial support, can help retailers thrive during the South African winter.
