Black Friday fails to boost retailers in November
Retail sales fell 4% year on year in November, far worse than the 2.6% decline expected by economists
SA retail sales fell at a faster-than-expected pace in November, underscoring the pressure Covid-19 is putting on consumers, and confirming that Black Friday failed to lure shoppers to stores in significant numbers.
A number of retailers had already reported that Black Friday sales were disappointing, with economists warning on Thursday that subdued confidence and the recent surge in infections pointed to a difficult start to the year for the sector.
SA retail sales declined 4% year on year in November, from a 2.3% decline in October, Stats SA said, the worst performance since August 2020, and worse than the 2.6% consensus fall expected by seven economists polled by Bloomberg.
Pressure was felt most by retailers in Stats SA’s “all other” category in November, which includes stores selling items such as stationery, sporting goods or second-hand goods. This category saw a 26.1% year-on-year decline, contributing 3.2 percentage points of decline for the headline figure.
Retailers in textiles, clothing, footwear and leather goods saw a 5.6% year-on-year decline, contributing negative 1.1 percentage points, while retailers in hardware, paint and glass saw a 14% year-on-year rise in sales — positively contributing 1.1 percentage points to the headline figure.
A 2.5% year-on-year decline for general dealers — nonspecialised stores that mainly sell food, beverages and tobacco — was surprising, noted Nedbank Group Economic Unit economists Nicky Weimar and Johannes Khosa.
General dealers are usually the main beneficiaries of Black Friday specials given that they offer bulk sales, the economists said, noting that the data showed the contribution of consumer spending to GDP in the last quarter of 2020 would be likely to be less than initially expected.
Overall, Covid-19 has had, and continues to have, a devastating impact on retail sector in SA, said chief economist at Stanlib Kevin Lings, noting that the retail sector's recovery was likely to be further constrained by harsher lockdown measures due to Covid-19.
“Unfortunately, this weakness is likely to intensify in the first two months of 2021 given ongoing lockdown restrictions, an expected increase in unemployment, lower salary adjustments, renewed load-shedding and less fiscal stimulus,” Lings said.
A number of retailers have recently released updates to the market outlining softer sales during the Black Friday period as the pandemic weighed on consumer spending and slowed foot traffic in malls.
Earlier on Thursday, Massmart, the owners of Makro and Game, told shareholders that, in line with what has been seen throughout the sector, “sales over the November 2020 Black Friday trading period were softer than those seen in 2019”.
It said, however, its extension of Black Friday promotions throughout the month did mitigate the impact of softer Black Friday weekend sales to some extent.
Fashion retailer TFG also reported recently that its November turnover was down 10.2% on a like-for-like basis, as it had to ensure compliance with several Covid-19 requirements, including the restriction on the number of customers in store and curtailing operational hours. The decline did, however, come against a record Black Friday in 2019, TFG said.
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