Publication: MoneyWeb
Date: 2024-03-26
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The Easter shopping season is anticipated to mark the beginning of a retail turnaround in South Africa, as indicated by a mixed method research study conducted by Capital Connect.
The weakened retail enviroment stemmed from low domestic economic growth, leading to rising unemployment and heightened consumer financial vulnerability.
Throughout 2023, retailers faced a challenging business landscape characterised by high consumer price inflation, particularly driven by surging fuel and energy costs. Elevated interest rates further impacted retail sales volumes and profits. These factors collectively contributed to retailers experiencing negative business confidence levels in 2023 and the first quarter of 2024.
The Capital Connect study however predicts a turnover increase of R2.219 billion for the entire retail sector during the Easter period, with growth underpinned by favourable macroeconomic trends that are expected to fuel a sustained recovery in retail sales throughout the year.
Projected growth rates for 2024
- The study forecasts 1.5% real retail sales growth for general dealers, with these retailers expected to garner approximately R1.38 billion in additional sales during the Easter period;
- Specialist food, beverage and tobacco stores are projected to achieve 1.3% real sales growth, with these retailers expected to generate approximately R521 million in additional sales during the Easter period;
- Pharmaceutical, medical goods, cosmetics, and toiletry dealers are expected to achieve sales growth of 0.5% in 2024 and to capture approximately R164 million in additional sales during the Easter period.
- Textiles, clothing, footwear, and leather goods dealers are expected to achieve real sales growth of 1%, but it is unlikely there will be significant additional sales value during the Easter period;
- Household furniture, appliances, and equipment dealers are expected to see a 1.5% increase in 2024, with approximately R151 million in additional sales during the Easter period; and
- Hardware, paint, and glass dealers are expected to see overall real retail trade sales growth of 3.2%, but with no significant expectations of additional sales value during the Easter period.
“The Easter season holds promise for retailers that are able to capitalise on the latest consumer trends,” says Capital Connect CEO Steven Heilbron.
“Those that are able to quickly expand their product ranges and offerings when there is an upsurge in demand, launch creative promotions, and react fast to volatile market conditions will outperform the rest.”
Products expected to sell particularly well over Easter, according to the study, include pickled fish, meat, fruit, vegetables, as well as sweets and Easter breads.
Alcoholic and non-alcoholic beverages, recreational equipment such as camping gear, and home content products like television sets, tableware, and cookware are also expected to see increased sales.