Black Friday has become one of the biggest shopping days on the South African calendar and heralds the start of the festive season in the country, where consumers typically unwind and splurge a little more on gifts and entertainment.
Retailers across the country line up specials and deals and throw out tons of marketing in a bid to entice consumers to spend.
While many shoppers will be out hunting for bargains on big-ticket items like TVs, smartphones and other tech – the bleak reality is that many South Africans will be using the day as a chance to stock up on basic necessities and fight for their survival.
A new survey conducted by Debt Rescue reflected this desperate financial situation, with a staggering 84% of consumers stating that they will be bargain-hunting for everyday necessities like food and toiletries over the Black Friday retail event.
While 74% of respondents said they would participate in Black Friday this year, their motivation is very different from bygone years when consumers engaged in wild shopping sprees for luxury goods and expensive gifts, Debt Rescue said.
“While inflation and record high living costs have spiked consumer demand to participate in the bargain hunt that is Black Friday, the focus will be on deals that will put more food on the table and help families to stock up on toiletries and necessary clothing items,” it said.
CEO of Debt Rescue Neil Roets said that the scenario this year reflects the real financial state of South African households, who are hanging on by a thin thread.
“People have had to ride the wave of relentless cost-of-living increases to make it through 2022, and all indications are that they will be taking a far more responsible and planned approach towards Black Friday deals this year,” he said.
“Consumers seem to know what they want and what they are willing to pay for it. This is very similar to the trend that has been shaping Black Friday for the past two years. The historic chaos of preceding years has shifted into a much more controlled approach because people now need to turn every cent over twice,” he said.
The Debt Rescue survey drew close to 5,000 responses.
62% stated that they plan to spend less this Black Friday compared to last year, with 52% planning to spend under R1,000.
“An interesting insight from the survey is that 77% of people intend to pay using cash rather than swiping their credit cards. This could mean one of two things – either people have over-extended their credit, or they are simply not willing to get into any more debt, no matter how appealing the purchase may seem,” Roets said.
Professor Carel van Aardt, research director at the Bureau of Market Research (BMR) agreed with the findings, saying that with a stagnating economy, rampant unemployment and rising inflation, the Black Friday period this year is about shopping for survival.
“With bleak economic prospects, we can expect to see consumers stock up on necessities rather than splashing out on luxuries for themselves or buying early Christmas presents for their loved ones,” he said.
The hot sellers this year – apart from groceries in bulk – are likely to include gadgets and equipment to help consumers navigate the load shedding crisis.
“In an environment of poor consumer confidence and weak discretionary income, we can also expect to see consumers trade down from expensive brands and products to white label brands and more affordable substitutes,” van Aardt said.
Roets said that far too many people are drowning in debt that they cannot pay off.
“Even though many might be tempted to indulge in retail therapy and present buying after a very tough year, they will think twice before parting with their money,” he said.
Government warnings
Warnings about overspending on Black Friday are also emanating from the government, with the Free State’s Department of Economic and Small Business Development adding its voice to calls for caution.
“The majority of consumers change their spending patterns during the festive season and indulge themselves in the situation of spending money that they do not have. As a result, they end up spending beyond their means and signing contractual agreements, which they have not properly read,” the department said.
It cautioned consumers against overspending, and said that they should shop with January in mind.
“Become a smart consumer on Black Friday and the festive season by saving or focusing on critical items such as next year’s school uniform, school fees, investments, etc,” it said.
Here are several ways to keep your spending under control during this festive season:
- Always plan ahead before you spend and work out what you can afford before you spend;
- Draw up a budget, putting down your income vs daily living expenses and debt. This will help you to be realistic about what you can spend on gifts, travel, accommodation, and other entertainment over this period;
- Always pay your creditors (store accounts, insurance, and medical scheme) on time during the festive season;
- Avoid little purchases, e.g. eating out, movies, daily takeaways, snacks, magazines, etc. It can all add up to one big debt burden;
- Avoid spending your 13th cheque/bonus on your “wants” instead of your “needs”; e.g. expensive clothes are “wants”, and school uniforms are “needs”;
- Always shop around for the best deals and prices before you make a purchase;
- Always be careful about the “buy now and pay later” deals;
- As you spend over the festive season, always remember that some bills, such as electricity, water, and telephones, do not go on holiday over the festive season and will need to be paid in the New Year.
- Avoid wasting money on inferior quality products because you will spend more money on repairs.
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