‘Bleak’ Friday: Consumers don’t have money, retailers can’t afford to give big discounts
By: Bonny Fourie – IOL Business
Black Friday is probably not going to be a grand event this year as consumers are already struggling to keep financially afloat and under-pressure retailers may not be able to offer great discounts.
Yes, November 24 will still be a buzzing day for many South Africans who can afford to splurge a bit – or have a habit of covering their eyes while they swipe their credit cards, but generally, it is expected to be a lot smaller than last year, which was not that great either.
Compared to a few years ago, FNB senior economist John Loos, says Black Friday this year – which also happens to fall a day or few before most people get paid, will not set off any fireworks.
There are a few reasons for this, including rising interest rates that have resulted in high costs of servicing debt; poor income growth; and slow GDP growth. While a slight decrease in price inflation this year is a positive, consumer confidence “remains weak”, and was at -16 points in Q3.
“It is not a wildly exciting time for consumers. What is also questionable is how much retailers can give in terms of good discounts. Retailers have been under pressure in recent years and are also suffering high inflation on the prices of their products and high operating costs.”
Furthermore, the run-up to Black Friday has been bleak for retailers as real retail sales have been in decline most of the year.
“So I don’t think Black Friday will be wonderful. Yes, it will produce a bit of a national spike like Christmas and other seasonal shopping periods do, but is it going to be as good as last year? My suspicion is that it won’t be,” Loos states.