Last year’s consumer spend left a lot to be desired. The fluctuating rand, economy as well as the political landscape may have affected the bottom lines of many retailers and shopping centres alike.

So says renowned economist and speaker, Daniel Silke, with regards to the looming Easter spend, there are contradictory forces at play.

“The VAT increase on April 1 could cause a run on bigger-ticket items as consumers attempt to beat paying the taxman extra. So, the period immediately before April 1, may see increased sales only to dip after the 1st. Overall, this should make for an Easter spend that is better overall than last year. Adding to this is increased positive sentiment following the ‘Ramaphoria’ path! Business sentiment has improved and the better political outcomes should add some impetus to consumers’ shopping habits. having said that, levels of disposable income remain depressed and there is no dent in the broader unemployment figures to help this,” he said

Looking back to 2010, there was a recovery in household consumption expenditure especially during the Easter period, driven by an aggressive interest rate cutting by the South African Reserve Bank along with an economic recovery, saw real retail sales growth rise from 3.1% decline in 2009 to a 5.6% rise in 2010, and on to a post-recession peak of 6.2% in 2011.

Then, in 2015, the sector had a mild boost to growth from a dip in consumer and retail price inflation in that year, sustaining its outperformance of economic growth. That dip passed on, and the economy ‘reinflated’ in 2016, while interest rates had been rising through 2014 to early-2016.

The country will need a sustained period of better growth numbers, movement on economic policy, a dent in youth unemployment and also clarity in terms of public sector wage negotiations before there is any major uptick. 

 

Daniel further added that the fuel levy will also have hard-hitting impacts on people. “The fuel levy can impose a further burden on us consumers. With a bit of currency luck – the ZAR should remain stable to stronger thus offsetting the fuel levy at least for the moment. So, my overall view is increased spend to beat VAT more than anything else. The country will need a sustained period of better growth numbers, movement on economic policy, a dent in youth unemployment and also clarity in terms of public sector wage negotiations before there is any major uptick. I am cautious on increased spend, but there will be enough to please most retailers who may view this as the turning point of a rather disappointing cycle,” added Daniel.

Tony Da Fonseca the Managing Director for OBC said that their Mpumalanga and Limpopo stores receive the best support over the Easter period. “The reason for this is that many thousands of people who live and work in Johannesburg or Pretoria visit their families over the Easter holidays. They purchase gifts for their loved ones and food items for a series of feasts. One of the main aspects we have noticed is that chicken is our undisputed bestseller while fish takes the lead during Easter. This is based largely on religious considerations,” he said.
Tony further added that the Thursday before Easter is the peak of their customer support over this period. “This year we confidently expect an increase of 20% in inflation-adjusted sales figures when compared to the same period in 2017. If one ignores the normal growth pattern our stores enjoy, a prime reason is that this year, Easter coincides with month-end. This means that workers would have received their salaries and grant monies before the holidays,” he said.