Good news about Black Friday in South Africa

This year’s Black Friday shopping season is expected to boost South Africa’s economy by R88 billion, with consumer interest projected to be higher in 2024 than in prior years.

Capital Connect found that South Africa’s wholesale, retail and fuel sectors are forecasted to generate more than R88 billion in additional economic value for the economy as a whole during November 2024.

The study, conducted by the Bureau of Market Research, showed that South African retailers will generate R22 billion in additional direct revenues from Black Friday sales this year and R28 billion in indirect economic impact. 

The indirect economic impact refers to the additional sales value of retailers’ suppliers, manufacturers from which suppliers obtain their stock, producers of raw materials used by manufacturers, and goods transporters.

In this same period, the wholesale sector will gain an additional R32.1 billion in sales, while a further R6.2 billion in fuel sales will be generated. 

The study found that consumer interest in Black Friday is expected to be higher in 2024 than in any of the past three years. 

This boost is expected to help drive total retail sales for November 2024 to approximately R136 billion, up 17.3% in nominal terms from the R116.1 billion recorded in November 2023. 

Total retail sales in 2024 are forecasted to be R1.45 trillion, a nominal improvement of 5.7% over the 2023 total of R1.37 trillion.

“The positive outlook for Black Friday 2024 indicates that the tide is turning for South African retailers after a long period of economic and retail stagnation,” said Capital Connect CEO Steven Heilbron.

“Among the factors that have helped to improve the economic outlook include vastly reduced load shedding, the introduction of the Two-Pot Retirement System, an interest rate cut, and lower inflation.” 

“Innovative retailers with the right product mix and promotions will benefit from the resulting rise in consumer confidence.” 

He explained that Black Friday sales are a welcome boost for retailers after a challenging year, with the formal retail sector expected to show real growth of only 1.4% for the whole of 2024.

The analysis projects that additional sales for retail subsectors during Black Friday 2024 will be as follows:

• General dealers: R10.5 billion 
• Textiles, clothing and footwear retailers: R5.6 billion 
• Household furniture, appliances and equipment retailers: R1.8 billion 
• Hardware, paint and glass stores: R1.5 billion 
• Food, beverages and tobacco in specialised stores: R278 million 
• Pharmaceutical and medical goods stores: No significant gains
• All other retailers: R2.4 billion  

Total Black Friday direct retail gains will amount to R22.08 billion, most coming from consumers buying necessities rather than luxuries. 

Two major beneficiaries of Black Friday will be the wholesale sector, which is a major supplier to retailers, and fuel sales due to the heightened level of deliveries of goods to retailers and consumers.

“The Black Friday period increasingly sets the tone for the all-important month of December, with the lines blurring between November promotions and the festive season,” he said. 

The study found that total retail sales are forecasted to be 19% higher in November and 48% higher in December than they were, on average, for the first 10 months of the year.

“The last two months of the year are an opportunity for agile, forward-thinking retailers to grow by outsmarting their competitors,” Heilbron said. 

“They need to move fast to seize opportunities, with a particularly tight focus on getting in the right stock at the right price to offer promotions that increase foot traffic and basket size.”