Advice and Opinion

Black Friday forecast – a mixed bag in store for consumers

Centurion Mall.
Centurion Mall.

The weeks that followed the hard lockdown at the end of March have been inconceivable for retailers with measures undertaken by Government to reduce the transmission of Covid-19. This has included mandatory isolation which has brought a sizeable chunk of the economy to a standstill. Retail, one of the mainstays, ground to a halt with only essential retail permitted to trade.

The unprecedented measures can be credited (in part) to South Africa’s stellar management of the public health crisis which has been said to be better than most developed countries.

With most parts of the economy now open and many employees back in their offices, retailers are looking forward to the days surrounding the American Thanksgiving holiday, a big draw for cash strapped consumers. Locally, Black Friday conjures up images of snaking queues and crowded stores, but it is likely to be muted this year as shoppers are required to social distance and to wear masks in store.

Nashil Chotoki, National Retail Asset Manager for Redefine Properties says stores will be expected to limit the number of people inside at any one time as part of the health regulations.

We are already seeing retailers working around this by extending promotions rather than limiting it to just a few days. We expect to see a Black November or even a Black December as retailers go all out to capture the available Rands and cents.”

Creating Covid-19 safe environments for consumers will also differentiate retailers and shopping centres which can become a driver for footfall and spend. By and large, all sectors in the country and more importantly, the retail sector, has played its part in ensuring consumers adhere to public health guidelines by enforcing masks, sanitising, and social distancing.

With the threat of Coronavirus still clear and present, malls and national retailers cannot risk attracting large crowds as seen in the preceding years, often camping outside and queuing for hours for deep discounts. Black Friday is just one more thing the pandemic has upended in 2020 but it is not all bad news.

Retailers are doing their best to safely draw in customers, and we have seen a better than expected recovery of retail footfall and sales. Since reopening, convenience malls have been performing better than large shopping centres as customers feel safer, in respect to Covid- 19, in outdoor, open air malls compared to enclosed shopping environments,” adds Chotoki.  

Black Friday is also getting a pandemic makeover like everything else this year. Instead of waiting for Cyber Monday, shoppers will be able to buy online all discounted products as deals that are usually reserved for in-store shopping will appear online during the month.  

In and through the pandemic, shoppers moved to the safer confines of ‘online’ in greater numbers, hoping to avoid crowds at stores, promise of contactless payments and retailers were quick to pivot adjusting their online offerings accordingly. 

Covid-19 has accelerated online sales, in particular groceries, however most online platforms are still operating at a loss and therefore we expect ‘click and collect’ to be more sustainable due to the lower cost of delivery.” adds Chotoki. 

While online sales are growing, we do not anticipate the South African market to reach levels being seen in developed countries in the foreseeable future mainly due to cost, access to the internet and logistics.” 

Despite the euphoria around Black Friday and the sales surge that follows, retailers are likely to run fewer discounting promotions compared to last year’s “door busting” deals as they cannot afford the reduction in margin following the series of Covid-19 related lockdowns.  

While retailers have accepted that it is likely to be a muted affair, they can draw comfort from a consumer base that feels a little more confident about spending, thanks to historically low interest rates which have partially cushioned the impact of lower salaries and employment on retail sales,” concludes Chotoki.