Trading outlook fragile as festive sales disappoint

Trade activity is expected to remain relatively weak in the first block of 2024 as the consumer environment remains timid – in response to continuing cost of living pressures – and as last year’s much-anticipated Black Friday and festive season sales boom flopped.

This is evidenced in data released by the South African Chamber of Commerce and Industry (Sacci) on Thursday, which showed that the industry was not particularly excited about 2024’s trade prospects but instead cautious about the harvest the new year will realistically bring.


Only 43% of Sacci members surveyed expected improvements in trade over the first six months of 2024.

Recent sentiment has been tainted by the less-than-desirable trade activity seen during the November and December trade periods of 2023.

Typically, the Black Friday and Christmas shopping periods see a boost in retail activity as consumers swarm to stores on the hunt for deals.

However, feedback from business indicates 2023 underperformed expectations, with Sacci reporting that 64% of those surveyed regarded the trade activity in December 2023 as worse than the year before.

Read: Black Friday slump: Bad timing, blackouts and tough times

A research note released by FNB on Thursday supports the sentiment that trade activity towards the end of last year failed to meet expectations.

According to the bank, retail sales fell by 0.9% year on year in November, continuing the declining trend which was reported in the prior month.

Only general dealers and other retailers’ categories registered volume increases in November, reporting 0.4% and 0.8% y-o-y increases, respectively.

However, categories that are traditionally yearend-spend favourites were not as lucky in 2023, with popular categories like clothing and footwear down 2%, hardware retailers down 5.3%, and food retailers seeing a 2.3% decline.

Read: Blackout Friday


Additionally, 67% of Sacci respondents reported lower sales volumes in December last year, with only 37% seeing a rise in new orders. This was as consumer demand remained weak and increases in sales prices were delayed.

“November’s Black Friday did not significantly boost trade, with more concern centred around rand volatility and exchange rate fluctuations. Although input cost increases have moderated, some still face price hikes of up to 12%,” Sacci said.

“Electricity supply remains a hindrance to trade, yet businesses have explored alternative supply routes. Seasonal patterns play a notable role in November/December trade conditions, and stifled economic prospects, along with current political manoeuvring, contribute to uncertainty,” Sacci added.

FNB expects consumer spending conservatism to continue in the near term until material relief from high inflation and interest rates is realised and the economy starts registering an increase in employment.

“Consumers should benefit from the slowing inflation trend, positive employment gains, and the extension of the Social Relief of Distress (SRD) grant.

“In addition, the contemplated, albeit modest, interest rate cutting cycle should help support spending on discretionary items. This should see household consumption expenditure lift from the estimated 0.8% y/y in 2023 to around 1.5% in 2024,” FNB added.

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