Like many nations around the globe, South Africa has adopted the idea of Black Friday, with the annual sale being one of many highlights of the yr from a retail perspective.
Statistics present that many South Africans look ahead to the annual Black Friday gross sales and are not afraid to spend their hard-earned cash on large purchases at these gross sales. Statistics from First National Bank (FNB) present that its cardholders spent 15% extra on Black Friday 2021 than in 2020. FNB cardholders spent R2.5 billion on Black Friday, the financial institution mentioned, and it processed greater than R2 billion in transactions by its terminals. Additional statistics from PayFast point out that the worth of transactions processed on Black Friday elevated by 30% when in comparison with 2020, with PayFast additionally reporting that spending on digital gadgets elevated by 120%.
But are South Africans really benefiting from Black Friday gross sales? Are there actual financial savings available? A lot of teachers from MANCOSA consider that we needs to be very sceptical about the entire idea of Black Friday.
Increased costs are not unusual
In the USA, Black Friday historically marks the start of the festive procuring season, with huge reductions (as much as 70% or 80%) on current merchandise to make means for brand spanking new items that corporations carry to market.
However, South Africa’s Black Friday reductions don’t appear to be as massive as those provided abroad. Dr. Farai Nyika, an educational in MANCOSA’s Department of Economics, urges South Africans to take a step again and query whether or not the gadgets they need are really discounted and are essential.
“Many retailers sell an item for, say, R1 400 with a sign saying the price has been reduced by 70%, so the original price is R2 000. However, if the consumer were to track the price of the same item throughout the year, they would find that the original price of the item in June or July was R1 400. Statistics show that retailers often inflate the prices of products in the months leading up to Black Friday to give consumers a false sense of savings,” says Dr. Nyika
Saving cash is the order of the day
Although customers are inspired to scrutinise the supposed financial savings on some merchandise very carefully, there are situations the place customers truly save on Black Friday gross sales.
“Another tactic used by retailers is to offer real savings on some products to lure consumers into their stores, where they will hopefully spend money on items that are not discounted. However, while there are limited savings on expensive items (such as electronics), there are savings on clothing and groceries. In recent years, we have noticed that consumers spend a little more money on clothing and food on Black Friday because they cannot afford the items at the normal price. This is especially the case in townships, where stokvels spend a lot of money on Black Friday and the goods are distributed among stokvel members,” says Winiswa Mavutha, an educational in MANCOSA’s Department of Marketing and Retail.
Low participation
Mavutha factors out that pleasure and adrenaline are historically a part of Black Friday gross sales in South Africa. Looking at 2019, there was a 15% enhance in Black Friday gross sales that befell in 2017 and 2018. Statistics from 2019 present that buyers spent practically 400 million rand on Black Friday gross sales in 2019. “In addition, a Geopoll survey found that a full 76% of South Africans participated in Black Friday sales in 2019, an increase of 64% from previous years. Judging from the increase in participation on Black Friday, South Africans seem to be gaining more momentum with regards to Black Friday deals each year,” says Mavutha.
Elisabeth Kanani, an educational in MANCOSA’s Department of Supply Chain Management, factors out that we must always not count on an analogous degree of participation in 2022. “South Africa is in a very different economic situation than in previous years. Unemployment is rising and the purchasing power of the Rand is falling. Consumers are trying to save wherever they can to make ends meet at the end of the month. As a result, I believe Black Friday will be a bit more muted this year as South Africans are looking very sceptically at the savings offered by retailers and are aware of their tactics,” says Kanani.
Dr. Nyika echoes this sentiment, pointing to key statistics. “The latest information from RCS Group shows that South Africans are saving on average 0.3% of their income per month. This means that the vast majority of South Africans have no savings and borrow money to make ends meet at the end of the month,” says Dr. Nyika.
Moreover, most of those loans are not used to pay money owed, however to place meals on the desk. “The Pietermaritzburg Economic Justice and Dignity Group tracks the average price of the basket of goods an average consumer buys. The October figures show that the price of an average basket of goods has increased by R98 month-on-month. In addition, the average basket price has increased by R400 from January to October. These pressures are also reflected in the Stellenbosch Consumer Confidence Index, which indicates that South Africans are generally pessimistic about the country’s economic future. Given these sentiments and pressures, we could see a quieter Black Friday than in previous years,” says Dr Nyika.
Retailers and retailers are an integral a part of the South African financial system as they supply jobs and revenue to thousands and thousands. Their success is important for the nation’s progress. Consumers are inspired to train warning and buy on Black Friday provided that they’ll afford to, and after doing their analysis on pricing.
Dr. Farai Nyika, an educational in MANCOSA’s Department of Economics.