Dark cloud casts shadow over Black Friday
JOHANNESBURG - THIS YEAR there was no Black Friday bonanza for major retailers as the resurgence of the Covid-19 pandemic, which has damaged not only the economy but led to job losses and constrained consumers’ spending power, deterred the usual throngs of shoppers.
Black Friday, which is the day following thanksgiving in the US, has been embraced by South African retailers who have used it to offer discounts to customers in the past five years that have usually resulted in a shopping frenzy, but this year was muted.
A shopper, who spoke on condition of anonymity at Eastgate Mall, in the east of Johannesburg, said Black Friday was not the same as in previous years because of Covid-19.
“I can see there are no people here. People are scared to come to shops because they fear contracting Covid-19 or because they do not have jobs any more,” said the shopper.
Escalating costs of food and utilities, combined with the expanded unemployment rate touching a record high of 41.3 percent in the third quarter due to Covid-19, have resulted in consumers scaling back further on discretionary spending.
Head of Pricing Research at Africa Analysis, Ofentse Dazela, said Black Friday specials were actually used as a precursor for more festive season pricecuts that were in the offing, intended to stimulate consumer expenditure and to increase sales volumes.
Dazela said the last quarter of the year was generally deemed a price-competitive period for the retail market and was characterised by price discounts targeting home-bound employees who usually visited shopping malls around this period.
“Many South Africans have lost their jobs, and those who are still fortunate to have a pay cheque do not know what the future holds, so people are probably hanging on to their cash at this point as a precaution,” said Dazela.
Traditional brick-and-mortar retailers came up with innovative strategies to bump up sales over Black Friday and Cyber Monday, including extending specials by two weeks and bolstering online specials in line with their online counterparts.
Efficient Group chief economist Dawie Roodt said the state of the economy and the move to online shopping had contributed to the lower foot-traffic at some stores.
He believed that, despite the economic woes, Black Friday and the upcoming Christmas shopping season were likely to boost normal consumer goods retailers.
“I will not be surprised if some of them do a lot better than a year ago because people are not going on holiday, they are staying at home, but they still want to have turkey for Christmas,” Roodt said, adding that electronic brick-and-mortar retailers had lost out to foreign online stores like Amazon as people migrated to online stores.
The year 2020 has taken its toll on the retail sector with fashion, home and beauty retailers – including The Foschini Group (TFG), Truworths and Mr Price Group – recording lower turnover due to the closure of outlets in March and April and as discretionary spending took strain.
In the year to date, TFG has weakened 30.74 percent to close at R101.02 a share on Friday, Truworths is 21.44 percent weaker in the year to date and closed at R38.65 a share, while Mr Price has lost 8.54 percent this year to close at R168.15 a share.
JSE-listed food and retailers Spar, Shoprite and Pick n Pay recorded steep sales declines of alcohol and tobacco products, which were prohibited at the height of the national lockdown.
Shoprite, Africa’s biggest food retailer, has strengthened 4.93 percent this year and was bid at R128.40 a share on Friday.
Rival Spar has lost a marginal 1.37 percent this year to close at R191.60 a share on Friday, while Pick n Pay has lost 18 percent to close at R52.32 a share.