South African shopping trends at the end of 2009

It comes as no surprise. Like their counterparts all over the world, South African consumers responded to the 2008-2009 global recession by shopping less.

In the third quarter of 2009, retail sales fell by 5,2 percent compared with the third quarter of 2008. The major contributors to this decrease were retailers in hardware, paint and glass, who saw a drop of 19,5 percent. The sales of the general dealers decreased by 2,8 percent, while the sales of all other retailers dropped by 12,6 percent.
The above figures are in constant, 2008 prices. The picture looks somewhat rosier when current, 2009 prices are bought into play.

At current prices, retail trade sales in South Africa increased by 4,5 percent in the third quarter of 2009, compared with the third quarter of 2008. The major contributors to this increase were general dealers (9,3 percent increase), retailers of food, beverages and tobacco in specialised stores (7,5 percent) and retailers in textiles, clothing, footwear and leather goods (4,4 percent increase).

The significant contraction in the disposable shopping income of South Africans seems to spell doom for retailers this festive season. The period leading to Christmas is traditionally the time of increased spending in South Africa. For retailers, this is often a major source of income, sometimes providing nourishment for moths to come. A disruption to this tradition would leave many businesses in dire straits.

Though some economists predict a bleak 2009 Christmas season spending-wise, others say that South Africa can expect business as usual – meaning, lots and lots of shopping.  Their reasoning is that, due to recession, more South Africans will forego international travel in favour of local holidays. The money that they would have been spent abroad will be spent at home, acting as a welcome stimulant for the local economy.  Besides, argue the optimists, we are beginning to see the first signs of recovery in the South African economy as well as internationally, and this positive sentiment is likely to encourage spending.

One international survey seems to backup the South African optimists. It found that South Africans will spend 5 percent more on food this holiday season than they did a year before, while the spending on gifts and on socialising will be 1.3 percent and 2.5 percent lower respectively. Overall, South Africans expect to spend half a percent more during Christmas 2009 than they did in the 2008 season. Not much – but still significantly more that the Europeans, who on average plan to spend 3.8 percent less this festive season than they did in 2008.

Also see:

Stats Online

Deloitte Christmas Survey 2009

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