A mix of downside risks and upside opportunities predicted for Easter sales of 2023
Additional retail sales value for Easter expected to dip around 1.6% as consumers cut spending on luxuries
Agile, diversified retailers are expected to benefit from Easter trade as price-sensitive customers eye Easter specials.
South African retailers are forecast to ring up additional retail sales value of R908 million for the 2023 Easter season, down from the R923 million in extra sales they generated over the same period in 2022. Yet the forecasts also reveal strong revenue generation opportunities for agile retailers that capitalise on consumers’ demand for sweet treats and discounted essentials.
That’s according to research conducted by the Bureau of Market Research (BMR) on behalf of Capital Connect, which reflects the financial strain consumers are taking in a difficult economic climate. For retailers to boost profits, they will need to think outside the box to benefit from the Easter peak trading season as well as leverage opportunities such as innovative, flexible fintech funding.
Retailers in pharmaceutical and medical goods, cosmetics, and toiletries are forecast to be among the winners, with additional Easter sales of R113 million, up from R89 million in 2022. Retailers in textiles, clothing, footwear, and leather goods are also expected to do well, with additional sales value jumping from R155 million in 2022 to R236 million this year.
Retailers in pharmaceutical and medical goods, cosmetics, and toiletries are expected to benefit because they have diversified their product and service ranges to include groceries, appliances, gifts, sweets and confectionery, clothing and footwear, and even spa services. General dealers, by contrast, are coming under pressure from increased competition and consumers cutting discretionary spending.
General dealers will take a knock from a decrease in consumer confidence, with additional sales value for this sector expected to drop from R346 million over the 2022 Easter period to R278 million this year. Specialised food, beverages, and tobacco retailers will see additional sales value dip from R296 million in 2022 to R226 million this year.
Despite the fall in additional retail value forecast for general dealers, they will still claim around 30% of additional sales for Easter 2023. Food, beverages, and tobacco retailers are expected to obtain only 9% of total retail expenditure during 2023 but are projected to claim 25% of total additional sales during Easter 2023.
Says Professor Carel van Aardt, Research Director at the BMR: “Retail sales for Easter 2023 are forecast to hold up relatively well, given high levels of consumer financial vulnerability and low levels of consumer confidence. Despite the economic pressures they face, consumers are still interested in what they could gain from Easter sales this year.”
“It is interesting to note that the Easter sales period seems to be getting longer each year, in much the same way as the Black Friday promotional period has. During 2020, consumer interest in the Easter Season was strong for 35 days from 8 March 2020 to 12 April 2020. This year, we’re expecting to see this interest last for as long as 46 days, meaning retailers will enjoy foot traffic for a longer period.”
Gerhard le Roux, National Head of Capital Growth at Capital Connect, adds: “The new research from BMR reflects a few important mega-trends which should make retailers sit up and pay attention. It’s clear that retailers across the board are diversifying to maintain and grow revenues, which means that every retail SMB needs to be flexible and innovative to get their share of the Easter profit pie.
“Furthermore, consumers are becoming ever-more price sensitive and continue to reduce spending on luxuries. Pricing strategy and specials are more important than ever to remain relevant. Finally, the BMR forecasts that consumers will expect to be able to shop when, how and where they please—whether that’s in-store, online or click-and-collect.”
RETAIL TIPS: Some ways retailers can thrive this upcoming Easter includes:
- Diversifying their product range to offer more choice and compensate for consumers cutting spending on certain luxuries;
- Extending store hours to maximise opportunities to win business;
- Using loyalty cards and rewards schemes to encourage repeat purchases;
- Using discount-oriented marketing and door buster specials to entice consumers into their stores;
- Giving consumers an experience in the store (shopper-tainME), such as Easter treats in the coffee shop, an Easter bunny for kids, or cooking and baking classes to prepare a five-star Easter family meal, to give them a reason to visit.
Steven Heilbron, CEO of Capital Connect, says: “As a retailer, you have the opportunity every day to grow your business and move it to the next level. The key to accessing these opportunities is affordable, convenient and hassle-free opportunity capital. With Capital Connect, retailers apply for business funding from the Connected App, choose their desired loan amount of up to R5 million, select their repayment period – and the funds will be in their bank account within 24 hours or less, so that they never miss out on a business opportunity.”