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The Power Table: Black Friday, green shoots?
It's one of the biggest shopping days on the global retail calendar – and it marks the start of the festive shopping season. I’m talking about Friday which kicks off tomorrow at midnight at a time when South Africa is facing its highest inflation rate in a decade and borrowing costs are on the up. So what will this mean for the success of Black Friday this year and will consumers be in for real discounts given pressure on retailers to protect margins. Joining CNBC Africa for this discussion is NielsenIQ Sub-Sahara Africa Analytics Director, Kobus Eksteen and Mike Middleton Chief Marketing Officer at the Shoprite Group.
Wed, 23 Nov 2022 11:58:40 GMT
Disclaimer: The following content is generated automatically by a GPT AI and may not be accurate. To verify the details, please watch the video
AI Generated Summary
- The significance of Black Friday as the biggest shopping event of the year in South Africa.
- The challenges for retailers in offering discounts while managing profit margins amidst high inflation rates.
- The shift towards online shopping and the importance of responsible spending in light of economic constraints.
As Black Friday approaches in South Africa, consumers and retailers are gearing up for one of the biggest shopping events of the year. The current economic landscape in the country, characterized by high inflation rates and increasing borrowing costs, poses challenges and uncertainties for both buyers and sellers. In a recent discussion on CNBC Africa, NielsenIQ Sub-Saharan Africa Analytics Director, Kobus Eksteen, and Mike Middleton, Chief Marketing Officer at the Shoprite Group, shed light on the trends and expectations for Black Friday 2022.
Black Friday, traditionally a key event for the retail industry, saw significant growth and success in 2021. NielsenIQ's data revealed that Black Friday sales surpassed the entire December festive period, highlighting its importance for brands and retailers. With over 8 billion rand in sales, Black Friday has become the single biggest week of the year for the FMCG industry in South Africa.
Eksteen emphasized the importance of Black Friday for brands, noting that for some, up to 22% of total annual sales occurred during this period. The event has become crucial for consumers seeking discounts amidst rising living costs and inflation. Middleton echoed this sentiment, highlighting the significance of Black Friday for price-conscious South African consumers.
However, the challenge for retailers lies in balancing meaningful discounts with maintaining profit margins. As food and essential items face steep inflation rates, retailers like Shoprite are cautious about the discounts they can offer. Middleton mentioned that while discounts could go up to 50% on certain products, they must ensure profitability and affordability for customers.
In terms of product offerings, both food essentials and non-food items are expected to see significant discounts. Eksteen highlighted popular categories like coffee creamer and rice, which saw high volumes sold at discounted prices during Black Friday last year. Middleton mentioned that appliances like air fryers have gained popularity due to their health benefits and cost-saving aspects.
Another important aspect of Black Friday strategy is the shift towards online shopping. While a significant increase in online sales was witnessed during lockdowns, recent reports show a slowdown in online retail. Middleton, however, remains optimistic about the growth of e-commerce and expects a continued upward trajectory for Shoprite's online platform, 60 60.
One of the key considerations for consumers during Black Friday is the mode of payment. With cash constraint challenges in the economy, Eksteen emphasized the importance of responsible spending and budgeting. Collaboration in buying groups and utilizing promotions wisely can help consumers make the most of the discounts available.
As the countdown to Black Friday begins, South African consumers are gearing up for a shopping extravaganza amidst economic uncertainties. Retailers like Shoprite are preparing to offer significant discounts across a range of products while navigating the delicate balance between profitability and affordability. With online shopping on the rise and consumer behavior evolving, Black Friday 2022 promises to be an eventful and challenging shopping experience.
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