South African retailers are forecast to ring up additional retail sales value of R908 million for the 2023 Easter season, down from the R923m in extra sales they generated over the same period in 2022.
Yet the forecasts also reveal strong revenue generation opportunities for agile retailers keen to capitalise on consumer demand for sweet treats and discounted essentials.
That’s according to research conducted by the Bureau of Market Research (BMR) on behalf of Capital Connect, which reflects the financial strain consumers are taking in a difficult economic climate.
According to the fintech solutions incubator, retailers interested in boosting profits will need to think outside the box to benefit from the Easter peak trading season.
It includes the possibility of benefiting from innovative, flexible funding.
Retailers in pharmaceutical and medical goods, cosmetics, and toiletries are forecast to be among the winners, with additional Easter sales of R113m, up from R89m in 2022.
Retailers in textiles, clothing, footwear, and leather goods are also expected to do well, with additional sales value jumping from R155m in 2022 to R236m this year.
Retailers in pharmaceutical and medical goods, cosmetics, and toiletries are expected to benefit because they have diversified their product and service ranges to include groceries, appliances, gifts, sweets and confectionery, clothing and footwear, and even spa services. General dealers, by contrast, are coming under pressure from increased competition and consumers cutting discretionary spending.
General dealers will take a knock from a decrease in consumer confidence, with additional sales value for this sector expected to drop from R346m over the 2022 Easter period to R278m this year. Specialised food, beverages and tobacco retailers will see additional sales value dip from R296m in 2022 to R226m this year.
Despite the fall in additional retail value forecast for general dealers, they will still claim around 30% of additional sales for Easter 2023. Food, beverages and tobacco retailers are expected to obtain only 9% of total retail expenditure during 2023, but are projected to claim 25% of total additional sales during Easter 2023.
Professor Carel van Aardt, research director at the BMR, says: “Retail sales for Easter 2023 are forecast to hold up relatively well, given high levels of consumer financial vulnerability and low levels of consumer confidence.
“Despite the economic pressures they face, consumers are still interested in what they could gain from Easter sales this year.”
“It is interesting to note that the Easter sales period seems to be getting longer each year, in much the same way as the Black Friday promotional period has. During 2020, consumer interest in the Easter season was strong for 35 days - from March 8, 2020 to April 12, 2020. This year, we’re expecting to see this interest last for as long as 46 days, meaning retailers will enjoy foot traffic for a longer period.”
Capital Connect executive Gerhard le Roux adds: “The new research from BMR reflects a few important megatrends which should make retailers sit up and pay attention.
“It’s clear that retailers across the board are diversifying to maintain and grow revenues, which means that every retail small to medium business needs to be flexible and innovative to get their share of the Easter profit pie.
“Furthermore, consumers are becoming ever-more price sensitive and continue to reduce spending on luxuries.
“Pricing strategy and specials are more important than ever to remain relevant.
“Finally, the BMR forecasts that consumers will expect to be able to shop when, how and where they please - whether that’s in-store, online or click-and-collect.”
