Cape Town - Consumers are “spending like there’s no tomorrow” on big ticket items this festive season despite a gloomy economy – a recipe for a rocky January for the hundreds of thousands flooding Cape malls.
Economist Dawie Roodt said the economy was weak heading into the festive season, but this doesn’t seem to have dampened spenders’ spirits in the slightest.
“I’m surprised by how upbeat people are, despite the condition of the economy,” he said. “The mood out there is much more upbeat than the numbers suggest.”
Roodt said economists seemed to be the only gloomy buyers among the frenzy of festive season shoppers, because they know the numbers behind the 2014 economy.
“The year started off on a low note with the strike in the platinum sector, then the electricity issues, but fortunately ended not too badly with a fall in petrol price, so that was some good news – but the bad news probably overshadowed it,” Roodt said. “And 2015 is not likely to be much better.”
Next month could come as a serious shock to the pockets of those who spent on credit this month.
“People must be careful, and plan ahead,” Roodt said. “Don’t spend too much on credit, because you’ll have to pay it back.”
The danger of debt is worse than ever in the five-week month between pay cheques.
“The danger is that interest rates are low and people may get sucked into a feeling of confidence, sucked into debt,” Roodt warned. “I’ve got a suspicion interest rates will go up in 2015, and then you have an extra burden.”
Canal Walk’s busiest day this festive season was on Saturday when close to 118 000 people visited the mall.
Marketing manager Vanessa Herbst said there had been positive feedback from tenants on shoppers’ spending compared to previous years.
“Most products bought during this time include technology, toys and fragrances.”
At Pick n Pay, Christmas sales were expected to be dominated by speciality products such as “more affordable” tablets and smartphones, digital toys and niche homeware items.
“Prices for smartphones and tablets have come down dramatically over the past year, with the result that the category has become much more accessible to the mass market. People can now buy a 3G wi-fi tablet for under R1 000, where just last year it was difficult to offer a wi-fi tablet for under R1 500,” said Pick n Pay’s Mark Wood.
He also predicted that niche homeware, including chopping boards, celebrity-branded knives, crockery and baking equipment, would feature strongly in Christmas sales this year given the recent growth in reality and celebrity cooking shows.
Online retailer takealot.com indicated that 40 percent of the most shopped items on its Top 10 Christmas gifts lists were for children, including a girls’ kitchen workbench and the Lego Star Wars Darth Vader Watch with Minifigure.
Woolworths said the festive season trade had so far lived up to expectations.
“We’ve seen brisk trade in convenience products like quick meals, snacks for entertainment and simple Christmas lunches for large or small families.
“Our top-selling line in food includes marshmallow strips, biscuit tins, sweetie trolleys and XXL braai mallows.”
Woolworths said their mall branches were by far the busiest, as expected, with the V&A Waterfront, Canal Walk, Cavendish and the Blue Route hauling in a healthy trade.
Waterfront spokeswoman Emma King said around 100 000 people had been visiting the tourist attraction every day, with up to 200 000 expected on peak days like tomorrow and New Year’s Eve.
“We won’t be able to communicate final numbers and spend until the end of the festive season, but all signs are showing it to be a bumper one,” King said. “At the moment it is as busy as previous years – our hotels are booked to capacity, with some running waiting lists, and we are seeing good foot traffic throughout the site.”
It wasn’t just South Africans buying up a storm – the London Daily Mail reported that high street shoppers in the UK were using credit cards to spend £1 million (about R1.8bn) a minute on Tuesday. And the sales were due to begin on Wednesday – even before the Christmas break.