Retail sales data released by Statistics SA this week shows that consumers are still reluctant to spend, with retail sales showing a contraction of 6.5% year-on-year in October from a revised 4.9% decline in September.
“Although the overall economy is now in expansion territory, retail sales for October suggest that it is going to take the South African consumer far longer to recover,” Investec Asset Management portfolio manager Vivienne Taberer told Sapa.
“A negative number of this magnitude provides further evidence of the level of strain the South African consumer remains under.”
Canny retailers anticipated that there would be less cash in consumers' pockets for Christmas shopping. So they either bulk bought to keep prices low, or took into account the appeal of “own brands” over premium brands.
Pick n Pay spokesperson Tamra Veley said while the retailer knew that consumers “are prepared to spend a bit more at this time of year ... we are conscious of economic pressure”.
For Shoprite Checkers, buying in bulk has meant that they can offer competitive prices, according to group marketing director Brian Weyers.
“While challenging trading conditions are expected to prevail well into 2010, the Christmas planning of the Shoprite and Checkers supermarket chains will provide consumers, especially the most price sensitive, a very price competitive destination to stock up.”
He added that sales of toys under R100 had been exceptionally strong. Another trend was for parents to buy toys that could be shared, or indoor and outdoor entertainment items for the whole family.
“This tells us that more consumers are preparing for a summer holiday in the backyard where they can spend quality time with family and friends,” said Weyers.
Rosemary Long, the spokesperson for Spargs SuperSpar in Beacon Bay, said recent expansion has given customers on every budget more choice.
“We have more space, we have more shelves to fill, thus we have a wider range,” she said. “We have a balance of luxury lines and budget lines ... and the Spar brands have also shown great and steady growth.”
Long noted that customers are still spending their hard-earned money on luxury items, but that they are spending wisely.
Source: Daily Dispatch
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