27 Dec.
Global economies would rather forget 2011: the euro zone and the US economies reeled from crisis to crisis, and while many businesses closed their doors for good this year in SA and unemployment is high, there is evidence of an upturn in retailing.
Paul Kent, managing director of SureSwipe, an independent credit and debit card swipe machine distributor, has a unique overview of retail and professional market trends (the company also serves the medical profession).
“What we are seeing is an end to strong negative spending patterns of the last two years and a slow but definite improvement in confidence and spending. While this won’t be a ‘great’ Christmas for retailers, it definitely will show a marked improvement on the last two years.”
While projections in the US are for stagnant retail spending or a lift of less than 3 percent, Kent projects figures will be better in SA.
“South Africans as a whole never bought into the culture of excess seen in the US and so consumers and the economy are more resilient. We find it easier to cut back and then to recover.”
While many US families are foregoing turkey and ham and opting for chilli (minced meat in a tomato gravy with chilli), those South Africans who want a special meat dish will probably opt for one.
“If anyone has ever doubted what a meat-loving nation this is then they should look at our figures; so far this year meat sales are up 19 percent and we project they will go up another three to five percentage points this season,” said Kent.
“And while fewer people will be going on holiday, they will invest more in home entertainment like game consoles, televisions, handheld computers and the like – sales of these are up 14 percent this year and they will probably edge up 3 to 5 percent this month.
“This is also the time of year when people are most likely to buy a new electrical appliance with their bonus – in December 2009 to November 2010 we saw electrical appliance sales grow 86 percent, and then plummet to only 20 percent last year.
“But comparing December 2009 to December 2010 there was still a 37 percent uptick in sales for these items, and we predict that figure will rise to just over 40 percent this season.
“The area that has shown the most worrying decrease is for food and beverages – consumers can’t cope with high food costs and it is here that many are far more budget conscious.
“From December 2009 to November 2010 we saw a 14 percent increase in food sales, but since then food sales have reversed, with a 14 percent decline. We’re pretty sure that the trend will continue for the foreseeable future. It has seen an 18 percent decline in trade through supermarkets in that period, and a whopping 25 percent decline through wholesalers.
“What that means is that consumers no longer see the value in buying in bulk and storing. They don’t have that sort of money any more. They are very price-conscious now and are shopping carefully and buying only when they need it. The days of having a big deep freeze and keeping it full are gone for most.”
But the rich are getting richer. There are signs that their early concerns about the financial crisis are waning – they know it will be here for some time and have taken measures to cope. “The best indicators of this are with jewellery, which was hammered in the early months and years of the global financial meltdown, but from December 2010 to November 2011 we saw an 118 percent rise in sales through these outlets. and although sales were only 4 percent year on year from December 2009 to December 2010, we predict that more people this year than last will find a watch or ring or some other bauble in their stocking.
“And the other indicator of that is with hairdressers, they have barely felt this crisis. they saw a 21 percent increase in credit and debit card swipes from December 2009 to December 2010 and only 11 percent up from December 2010 to November 2011, but they are still outperforming most other sectors of the economy.”
Kent said other areas had also strengthened since last year.
Source: Business Report
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