Pick n Pay hopes for festive bounce despite modest toy sales

© Alekss - Fotolia.com

The market for video games in South Africa generated revenues of R2.2bn last year‚ according to professional services firm PwC‚ and tablets‚ still a largely untapped market‚ will boost mobile gaming over the medium term as they offer more compelling and complex gaming‚ combined with the convenience of mobile broadband and a "play anywhere" ethos.

Sales of technology accessories‚ such as speakers and headphones‚ are also on the rise in South Africa and are particularly popular during the Christmas trading period.

According to Mark Wood‚ GM of the general merchandise buying division at Pick n Pay‚ although the proliferation of tech products has muted sales growth of traditional toys over the past few years‚ the category remains important for the retailer.

"A significant percentage of our annual income from toy sales occurs over the festive season‚ so it's very important that we are able to increase our stock levels of traditional toys over this period‚ which requires highly accurate stock planning based on excellent market insight‚" he said.

Using insights gathered from its 7-million-member Smart Shopper loyalty programme‚ Pick n Pay is stocking its stores with the types and volumes of products that best suit the profiles of its customers.

"This is key to the success of traditional toy sales this year‚" Wood said.

While household budgets are under pressure in South Africa as consumers battle rising costs‚ debt and unemployment‚ the EY/Bureau for Economic Research festive-season retail survey suggests that sales growth will be less buoyant compared to robust rates recorded during the 2010 and 2011 festive seasons.

The growth in retail sales volumes should‚ however‚ top the weak number recorded last Christmas.

In the run-up to the festive season‚ sales of hardware products and semi-durable goods such as clothing‚ footwear‚ sporting equipment‚ CDs and toys remained healthy‚ while sales of non-durable goods such as food‚ beverages‚ groceries and cosmetics appeared to be recovering from the low levels recorded earlier this year.