South African Retailers Set for Boost in Black Friday Sales Amid Positive Consumer Sentiment

South African Retailers Gear Up for Boosted Black Friday Sales as Consumer Confidence Rises

South African consumer sentiment has improved in 2024, setting the stage for robust Black Friday and festive season sales. NIQ South Africa’s recent State of the Retail Nation report reveals that the retail sector, including major players like Pick n Pay and Shoprite, is primed for growth as Black Friday approaches.

According to NIQ’s data, 42% of South African consumers feel better off financially than they did last year. Despite ongoing challenges from higher living costs and slow wage growth, factors like paused load shedding, increased Social Relief Distress (SRD) grants, and lower fuel prices have contributed to positive consumer confidence. NIQ’s managing director, Zak Haeri, notes that these factors create favorable conditions for retailers with enticing Black Friday promotions, particularly in tech and durable goods.

Rising FMCG and Tech Sales

The report highlights steady growth in South Africa’s Fast-Moving Consumer Goods (FMCG) sector, with food and liquor sales reaching around R354 billion in the year ending September 2024. South Africans spent R274 billion on non-alcoholic beverages, personal and healthcare products, snacks, home and pet supplies, and other essentials, marking a 2.6% increase in sales value from Q3 2023.

Haeri explains that South Africans are increasingly prioritizing value for money, opting for smaller packs to manage daily spending or larger packs for bulk savings. Private-label products are gaining ground, with annual FMCG sales expected to surpass R100 billion as consumers focus on budget-friendly options.

Tech and Durables Market: Targeting Intentional Shoppers

South Africa’s tech and durables sector has shown solid growth, especially in information technology, major domestic appliances, and small appliances, each experiencing a 9-10% increase in value this year. However, telecom and consumer electronics categories have seen slight declines, which may impact the types of deals offered.

Thomas Woods, Market Intelligence Lead for NIQ South Africa, expects this Black Friday to focus on bundling offers and exclusive deals in tech and durables. “Shoppers are looking for value, but deep discounts may be less common as retailers aim to protect margins,” says Woods. He notes that TV sets, large appliances, and small domestic appliances are likely to lead Black Friday sales.

What to Expect This Black Friday

Black Friday has transformed from a single shopping day into a month-long promotional period in South Africa, with the peak occurring over the Black Friday weekend. Woods anticipates that new brands, especially Chinese disruptors, will use Black Friday as an opportunity to enter the South African market, potentially driving increased competition.

“While deep discounts are not as prevalent, retailers have a golden opportunity to capture revenue growth through strategic promotions,” Woods notes. With a blend of discounts, bundling options, and exclusive deals, this Black Friday is shaping up to be a pivotal season for South African retailers.

Navigating a Competitive Retail Landscape

With South African consumers carefully choosing where to spend, retailers are prioritizing loyalty programs and promotions that align with consumer needs. As Haeri from NIQ concludes, “A continued focus on consumer preferences and strategic financial approaches will be key for FMCG retailers and manufacturers in the current market landscape.”

This Black Friday and festive season, shoppers can expect a variety of promotions that cater to both budget-conscious and tech-savvy consumers, setting the stage for a promising retail season in South Africa.