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There has been a positive shift in how South Africans spend their money over the past months, which can be a sign of recovery from the high repo rate and inflation.
The State of the Retail Nation report by Niq South Africa compared consumers’ financial positions from 2023 and 2024 to anticipate healthy sales growth for Black Friday and the festive season periods.
Although 42% of respondents believe they are in a better financial position than the previous year, factors such as the cost of living, low wage growth and unemployment continue to be a challenge for many.
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The report also revealed that 33% of their respondents feel worse off than last year. The reason for this includes increased living costs, the economic slowdown and concerns about job security.
However, Zak Haeri, MD for Niq in South Africa said factors that have helped consumer confidence are a pause in load shedding, an increase in the social relief distress (SRD) grant, lower fuel prices, and moderating inflation in line with global trends.
“This clears the way for retailers with attractive promotions to benefit from stronger consumer spending over the Black Friday week, especially tech and durables dealers. However, the market remains challenging as consumers focus on value for money.”
He added that although consumer confidence has increased, South Africans are making “purposeful” choices. The report shows that most consumers are prioritising in-home activities, pre-planned purchases and waste avoidance.
The tech and durables market has also seen an increase for major domestic appliances (+10%) and small domestic appliances (+9%) have all performed well for the first three quarters of the year, while the telecoms (-1%) and consumer electronics (-2%) segments are slightly down.
Thomas Woods, Market Intelligence Lead for Niq in South Africa, said consumers have moved from being cautious to intentional when it comes to purchasing tech and durables.
“We have noticed a jump in major domestic appliance sales in September, with fridges and washing machines up in value by 12% and 21% respectively. Top loader washing machines have shown over 20% value growth throughout the year.”
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Woods added that two-pot withdrawals are one of the possible reasons for increased tech and durables sales.
“Over the past few years, Black Friday in South Africa has grown from a day or a week of promotions to encompass nearly a full month of specials over November. However, the Black Friday weekend is the critical moment since many consumers wait till then to see what rewards are on offer.”
Woods is of the view that TVs and domestic appliances are the strongest selling categories on Black Friday.
The report show that South Africans have spent R354 billion on food and liquor for the 12 months to end September 2024 and R274 billion on other goods including non-alcoholic beverages, personal and healthcare products, snacks, home and pet supplies, baby food and care, and tobacco.
Haeri added that consumers have prioritised spending more on utilities and education, above grocery and household items.
“Fresh and perishable goods continue to see improved sales volumes due to lower levels of load shedding. Liquor and ambient food are experiencing the greatest incremental growth, driven specifically by beer and frozen meat.”
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