Retailers can expect an uptick in sales over Easter – study

Retailers can expect to see gains in sales over the upcoming Easter weekend despite trading in an environment hit by an economic storm.

The latest Easter retail research study by Capital Connect (a fintech business funding division within Connect Group) shows that end-of-season sales, Easter-related promotions and school holidays all help to drive an uptick in retail trade over the Easter period, although not all retailers will benefit equally.

During a media presentation of the study on Wednesday, Capital Connect CEO Steven Heilbron said: “A strong Easter trading season will give South African retailers some respite in a year [wherein] they are facing a perfect economic storm, with high unemployment, weak economic growth and the return of inflation impacting consumer and business confidence.

“Agile retailers that invest in promotions, new offerings and more diverse product ranges will be best positioned to profit from this trading period, especially if they take advantage of the opportunity capital at their disposal from alternative lenders.

“Given the pressure on the consumer’s wallet and the steep competition in the market, retailers will need to be smarter, faster and more creative than the rest to win the consumer’s business.”

Between 2010 and 2019, general retailers reported substantial returns in sales due to the Easter season. This upward trend surged significantly in 2020 as the pandemic had just hit South Africa and consumers were stockpiling essential goods.

Pandemic impact

According to the study, retailers can also expect to see gains this year as volatility over the Easter sales season continues to be impacted by the pandemic.

Many people have lost their jobs and or are battling soaring inflation. The study reveals that many consumers await the Easter sales season to bulk-buy and stock up on necessities given the discounted rates and products being advertised as a special offering.

Professor and research director at Unisa’s Bureau of Market Research Carel van Aardt explains that Easter retail trading patterns differ significantly from those seen over Black Friday and the festive season, when consumers spend more on big-ticket items like electronics and appliances.

He says the hot sellers over Easter typically include high-volume goods like food, alcoholic beverages, confectionaries and clothes.

“To increase margins and sales, retailers need to really understand what the customer wants and deliver it as quickly, cheaply and with the highest possible quality level. They also need to innovate and diversify.

“Smart advertising executions and in-store experiences such as ‘shoppertainment’ are key to creating a wow factor that brings shoppers into your store.”

General marketing manager at Connect Group Sumay Dippenaar similarly believes that Easter is the next peak trading season for many South Africans after Black Friday and the festive season.

‘Shopper excitement’

“There are generally loads of promotions and specials around this time of the year, with lots of advertising about these promotions. There is always some ‘shopper excitement’ that’s created, also known as ‘shoppertainment’, with Easter Egg hunts and bunnies walking around in shopping malls.…” says Dippenaar.

She notes that consumers are more prone to buying high-end goods such as laptops and cellphones over the Black Friday weekend and buy a broad range of mostly costly items over the festive season. However, they tend to go for cheaper items such as end-of-season goods, cakes, linen, and clothing over Easter.

“Because Easter is known as a time to spend with family and friends consumers are buying more party and celebration goodies than usual, like confectionaries and alcoholic beverages.”

Dippenaar adds that retail dealers such as supermarkets, liquor stores, textile, clothing, and footwear stores can expect to gain the most and have a good Easter trade overall.

“It’s important to note that retailers will drag out the Easter season with promotions and specials for as long as they can. So we can expect the Easter trade to last even until the end of April. A good example of this is the [Checkers] Heydays specials that will stretch beyond the Easter festivities, having a positive impact on sales.”

Listen to Fifi Peters’s interview with Independent analyst Chris Gilmour on the retail sector (or read the transcript here):

Palesa Mofokeng is a Moneyweb intern.