Tracking SA festive season buyer behaviour

As the festive season approaches, South African consumers are gearing up to make their holiday purchases. According to consumer intelligence firm NIQ and GFK, smartphones, refrigerators, washing machines, and personal care brands are expected to be popular choices this festive season, based on the trends observed during Black Friday. To delve deeper into the festive spending trends and forecast consumer buying habits for 2024, CNBC Africa interviewed Zak Haeri, the Managing Director of NIQ South Africa. Haeri discussed the impact of inflation and interest rates on consumer behavior, noting that many consumers may feel relieved that the worst of the cost of living crisis is potentially behind them. Despite this, Haeri highlighted a slight decrease in sales during the Black Friday week compared to the previous year. Electricals and appliances were down by 3.6%, while groceries saw a 4% decline in unit and volume terms. However, Black Friday remains a crucial driver of sales, with significant revenue generated for products like electricals and appliances and groceries. One key factor influencing consumer spending patterns is the pressure on disposable income. Real wages have stagnated in recent years, while prices have steadily risen, leading to a contraction in sales across various product categories. Haeri emphasized that price increases are offsetting the growth in purchases, maintaining a balance in the market. Looking ahead to 2024, Haeri predicted a continuation of the current trends, with some pressure on units and volumes expected. Companies are advised to address the unique challenges present in the South African market and seek opportunities for value innovation. By identifying and solving these challenges, businesses can innovate and thrive in the evolving economic landscape. The RMB/FNB Consumer Confidence Index also indicated that consumers may be less inclined to spend lavishly this festive season due to concerns about the economy's outlook. However, Haeri emphasized the importance of companies adapting to the market conditions and exploring innovative solutions to drive growth in 2024. Despite the uncertainties surrounding consumer confidence and economic stability, there are potential opportunities for businesses to differentiate themselves and succeed in the market. As South Africa navigates through economic challenges and shifting consumer preferences, companies are encouraged to be agile and proactive in their approach to product development and marketing strategies. By understanding the evolving consumer landscape and responding effectively to market dynamics, businesses can position themselves for success in the upcoming year.