South Africans will be shopping for useful gifts this Christmas, with most buying products that are on sale. Store loyalty programmes may also influence their decisions.
This is according to Deloitte’s year-end holiday survey, which also suggests that South Africans will increase their holiday spending on food, gifts and socialising by an average of 5.7 percent, despite having reported a decline in overall spending power.
Consumers are expected to stock up on food items over the Christmas period and will probably give loved ones gifts that are practical, useful and on sale. Photo: Simphiwe Mbokazi. Credit: inlsa
Leading retailers agreed with the survey, saying that consumers were looking for practical gifts, while some said consumers would stock up on food items, meat, electronic items, branded home appliances and fashionable clothing.
Bakar Jakoet, the financial director of Pick n Pay, said last week that trading usually picked up from the end of November when people received their year-end bonuses.
“We are cognisant of the fact that many people will be looking to buy practical gifts this year and we are well stocked with a wide range of these to suit all pockets.”
The supermarket group was also expecting customers to make use of the SmartShopper programme by cashing in points they had accumulated during the year to spoil their families over Christmas.
Rodger George, a consumer business industry leader at Deloitte, said: “The need to celebrate and share gifts, despite the unfavourable conditions, will affect the purchase behaviour of shoppers over the festive season.”
He said consumers were likely to seek out promotions and specials to offset the increases in living, electricity, education and health costs.
George said people were more likely to buy laptops for their children going to university next year, rather than spend money on any other gift.
Shoprite and Massmart believed Barbie dolls would still top the list for little girls.
Massmart said it had noticed that headphones and do-it-yourself kits were a huge trend this year.
“As South Africans become increasingly cosmopolitan, bean-to-cup coffee machines have become increasingly popular. Massmart’s Dionwired will focus on the latest technological trends including a wide range of headphones and new range of recently launched iPods.”
Massmart said it had planned for Christmas trading to be at the levels of sales growth experienced so far in this financial year.
For the 20 weeks ended on November 11, Massmart’s total sales growth was 16.2 percent, and comparable sales growth was 7.3 percent.
When it came to technology, the survey revealed that while cash topped the gift wish list for South African adults, smartphones also entered the adult top 10 most-wished-for gifts for the first time this year.
About 24 percent of South Africans surveyed included a smartphone or tablet computer on their wish list this year.
But George said: “Unfortunately they are unlikely to receive smartphones and tablets as these were ranked only 28th and 29th on the list of gifts likely to be given.”
Video games and CDs were gifts that adults were most likely to buy for teenagers.
Shoprite said sales had picked up slightly over the past few days.
The retailer said it had stocked up on small electrical appliances, dinnerware, kitchen utensils and electronics. Shoprite also had ample supplies of top-selling traditional meats such as gammon, corned beef and corned tongue.
Edcon, which trades under brands Jet, JetMart, Edgars and Legit, said it had increased its knowledge of customer profiles and shopping habits and would capitalise on this by offering products that were responsive to current trends.
The retailer had stocked up on high-end local apparel such as Jo Borkett and Marion and Lindie, as well as a number of international brands such as Forever New and Aldo.
Jet was carrying almost exclusively private label products with a focus on basics for the family and household.
Edcon said its most important trading periods in terms of retail sales were the Easter and Christmas seasons, with 34 percent of its retail sales occurring in April, November and December combined, in the previous reporting period.
The retailer said it was preparing for a volatile festive season in line with the current economic environment.
- Read part two on retail market share dynamics tomorrow.