• New research from the Bureau of Market Research (BMR) estimates that Black Friday 2023 could generate R26.6 billion for South Africa’s retail industry.
• This is a marked increase of R7.6 billion over the sales figures seen last year.
• However, poor global market conditions will see shoppers choosing to stock up on essentials this Black Friday rather than splurging on luxury goods.

The Black Friday season is upon us, and already the news and specials are trickling in. Retail giant Massmart has already announced the beginning of its discounts that will run for the rest of November and other retailers will soon follow suit.

New research conducted by the Bureau of Market Research (BMR) paid for by South African financial technology provider Capital Connect estimates that the Black Friday season in 2023, running throughout November, could generate a whopping R26.6 billion for the South African retail industry.

Additionally, the research estimates that some 150 000 seasonal jobs could be created during the period, and after. Interestingly, these estimates mark a massive R7.6 billion increase over the sales figures from Black Friday 2022.

That year, despite lower overall sales than the year prior, marked a record performance from firms like Takealot. The ecommerce mainstay hosts a one-day shopping extravaganza every Black Friday and in 2022 saw a 33 percent increase in sales from the year prior, with the largest single-basket purchase on that day an eyewatering R190 179.

There is more good news for the ecommerce sector this year as online retail channels are earmarked to grow around 15 percent in total retail value in 2023. In 2022 these sectors saw revenues of around R50 billion across the year.

Now with this year slated to be a big one for shopping, Takealot and its rivals will surely put on a show. However, despite the signs that 2023 will be a major year for the shopping craze on 24th November, sales will still fail to see revenues generated in 2021.

According to the same research, 2021 was one of the most valuable Black Fridays ever, generating R42 billion for the South African retail industry as sales were lifted by pent-up demand due to strict COVID-19 lockdowns.

In terms of what the difference Black Friday will make this year for specific industries, the research details that the food, beverage, tobacco, medical goods, and pharmaceutical industries will not see any significant gains. But clothing and footwear will see R15 billion increase in sales, while household furniture and appliances will see a R1.6 billion increase.

Hardware, paint and glass will see a more humble R707 million in sales. Black Friday sales of general retailers are expected to increase by R9.3 billion this year.

“Black Friday 2023 and the festive season provide a unique opportunity for savvy retailers to capitalise on increased consumer spending,” says Steven Heilbron, CEO of Capital Connect.

“Beyond this seasonal surge, the IMF’s revised economic outlook for 2023 indicates that South Africa’s GDP growth may come in at a higher than expected 0.9%. This indicates slight improvements to market conditions for retailers.”

South Africa’s economic growth has been sluggish post-pandemic, however, with Black Friday and the holiday season, consumer spending in the shops could generate a total of R60 billion to close out 2023.

This year will also mark a change in what people decide to spend money on, and echoing Massmart’s own indications, the research notes that consumers will look to stock up on essentials en masse, including food staples, household essentials, clothing, and hardware for urgent home repairs and maintenance.

As such, retailers shouldn’t expect to move too many large appliances this year as harsh economic conditions have buyers prioritising needs before wants.

“Black Friday sales are a central part of a shopping festival that spans from late October to late December,” explains Professor Carel van Aardt, Research Director at the BMR.

“But the sales profile of Black Friday differs from the festive season, thus creating opportunities for savvy retailers to capitalise on revenue opportunities by adjusting to shifting consumer demand. Higher earnings during this important season will help retailers to compensate for depressed consumer spending throughout the year.”

[Image – Photo by Tamanna Rumee on Unsplash]