Black Friday better than 2020’s but consumer spending remains subdued

Black Friday this year was better than it was last year, but not as good as it was in 2019 as South African consumers remain strapped for cash. 

Countries around the world, including South Africa, have latched onto Black Friday to improve sales. It is a colloquial term for the Friday following the Thanksgiving public holiday in the US, which traditionally marks the start of the Christmas shopping season and during which many stores offer highly promoted goods at big discounts. This year Black Friday fell on 26 November.

In South Africa, for the first trading hour of Black Friday, from midnight to 1am, transactions were down 6.2% year-on-year, according to data from online payment platform PayU.

The drop in transactions for the first hour of the day was first seen last year with a 33% slump in volume compared with 2019.

“This seems to stem from last year’s disappointing Black Friday experience, where many shoppers felt the good deals simply didn’t materialise, and, of course, the fact that people have less money,” said Karen Nadasen, chief executive of PayU South Africa. 

In a statement, Nadasen noted that from 2020 many retailers extended their discounts and promotions to last the entire month of November — dubbing it “Black November” — but this had slightly reduced the novelty of Black Friday. 

“Black November? Where do you draw the line? A black year? You can’t discount everything, forever,” Casparus Treurnicht, an analyst at Gryphon Asset Management, told the Mail & Guardian.  

“From what I’ve seen, items that went on special during the week didn’t get cheaper on Friday. I think it’s also a reflection of how hard competition has become between retailers as they are still affected by the impact of Covid-19,” Treurnicht added.

This year, shopping continued to increase throughout the day, only starting to slow down after 8pm, Nadasen said. 

Total online spending increased by 6% year-on-year.

“South Africans are shopping online confidently due to Covid-19 and lockdowns accelerating our shift to online — but despite the increased number of shoppers the actual overall rand value for the day has nudged only a little,” Nadasen said.

“The pool of money that people have to spend on consumer goods is not growing that much anymore,” Treurnicht added. “Consumers are trying to get as much as possible out of every single rand … with the whole Covid-19 pandemic over the past year and a bit, you are sitting with a greater proportion of the workforce that is unemployed and [they] are going after cheaper goods.” 

Clothing and electronics were the biggest selling items with a 19% increase on last year, but beauty and health were down 31% and 34%, respectively.

FNB put out its own data showing that its card holders made purchases in excess of R2.5-billion on Black Friday, an increase of 15% compared to 2020.

In a statement, FNB said a peak of 490 transactions per second were recorded, an improvement on 2020 but on par with volumes processed in 2019.

“While Black Friday is usually the peak shopping period, Cyber Monday has been equally popular in recent years. As a result, we expect to see customers taking advantage of any specials on tech or digital products,” said Chris Labuschagne, the chief executive of FNB Card.

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Anathi Madubela
Anathi Madubela is a business journalist with a keen interest in the retail sector.

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