Shopping boom despite gloom

Times may be tough, but consumers are still expected to shop up a storm this Christmas.

The Cape Town Regional Chamber of Commerce and Industry found a ‘surprising mood of optimism’ in a survey of local businesses. However, big-ticket items like appliances and furniture may suffer, as higher interest rates and double-digit inflation take their toll on consumers.
Consumer confidence remained dampened by the prevailing economic dismay, according to a survey released this week.
Nevertheless, many businesses still hope to do a roaring trade.
Two-thirds of traders polled by the chamber looked forward to increased sales over the festive season. Such was the confidence that the same proportion of businesses said they had no plans to offer discounts to lure shoppers.
Most small businesses, which employ fewer than 30 people, expected a decline.
But large chain stores forecast sales to jump by more than 20 percent.
Most businesses predicted sales to rise by 10 percent to 14 percent.
Albert Schuitmaker, director of the chamber, said the results of the survey were ‘rather better than we might have expected given the nature of the global financial crisis’.
It boded well for holiday business, since previous surveys had often underestimated sales.
‘Traders expected the overwhelming majority of customers to be more price-conscious this year, but nearly a third expected their customers to insist on better quality products,’ the chamber said.
The chamber’s survey echoed assessments by companies.
Pick n Pay chief executive Nick Badminton said the company was ‘confident of a reasonably good Christmas’.
And, no matter how bad the belt-tightening, certain items remained on everyone’s shopping lists.
Badminton said in an economic downturn food and liquor usually sold more. In a way, the economic crunch could work in Pick n Pay’s favour, he said.
‘We are confident of a reasonably good Christmas this year, particularly because it is likely that more South Africans will stay at home rather than travel over the festive period.’
Beermaker SAB agreed.
‘The festive season is our peak trading period and we see a surge in sales each year as most consumers celebrate the summer holiday period by socialising more with family and friends,’ said SAB spokeswoman Janine van Stolk.
‘Although we don’t necessarily expect a greater than normal surge in volumes compared to last year, we are fully prepared to meet consumer demand. Traditionally, beer has been more resilient in tough economic times and appears to be holding up well as we go into the season.’
Consumer confidence slipped further in the fourth quarter of this year, a survey by First National Bank and the Bureau for Economic Research found.
The survey asked consumers how they expected the economy to perform during the next 12 months, the details of their expected change in household finances, and whether they thought this was a good time to buy durable goods like household furniture and appliances.
Most consumers were pessimistic about the economy, their finances and their ability to buy durable goods. But, if the daily activity in shopping malls around inner Cape Town were not enough proof that South Africans are still happily shopping in spite of their stretched budgets, then credit figures released last month by the Reserve Bank should suffice.
Private sector credit growth eased slightly to 16,17 per cent in October, from 16,28 per cent in September. – Business Report