o_18thitrba1dr417tbpqe1soiuvva.pdf

p20 :: Industry
Holiday sales
better than expected
Retail sales during the past holiday season were slightly better than last year, although the weakening
currency and worrying economy are cause for concern. JOHANN DU TOIT reports on the results
of the annual Sports Trader survey of holiday sales in the sport, outdoor and lifestyle retail industry
Despite a very tough year, 2013
holiday sales in most sport, outdoor
and lifestyle retailers were
better than expected, responses
to the annual Sports Trader Holiday
Sales survey* showed. Sales were largely
as expected, with no nasty shocks in terms of
sales. While sales haven’t grown exceptionally,
they haven’t been exceedingly bad either,
and have increased slightly since the 2012
holiday season.
The worsening currency value and poor economic
forecasts, however, affected consumers
negatively, which prevented strong holiday
sales figures.
December sales figures
The average response to our survey shows
that December 2013 sales where slightly better
than last year’s, with 50% of respondents
reporting better sales, and 15% saying that
sales were about the same. Slightly more
(15% compared to 10%) respondents claimed
much higher sales, with 20% or more growth.
However, the number of respondents reporting
drastically lower sales (decreasing 20% or
more) than last year has increased by 3.3%.
This would suggest that the gap between retailers
having a good year and retailers having
a bad year, is increasing.
The average responses to our survey over
the last four years concerning pre-Christmas
sales indicate that the growth of sales between
2010 and 2011 was followed by a sharp
decrease in sales growth in 2012 (See Fig 1).
2013 was a better year, with a slight recovery
from last years’ recession.
Retail respondents are not overly positive
or negative about their December sales.
About a third (30%) of respondents had better
pre-Christmas sales than expected, while
30% reported lower sales than expected. The
majority (40%) of respondents say that the
pre-Christmas sales were about the same as
expected. Taking an average of theses results,
it seems that retailers had a fairly predictable
pre-Christmas period.
Taking into account that retailers considered
2012 a particularly bad year, this could mean
that retailers have come to expect the worst
for the holiday season. This is excusable when
looking at the holiday sales expectations of
retailers over the past four years (See Fig 2).
After 2011 largely exceeded respondents’ expectations,
2012 was exceedingly worse than
expected. It seems as if retailers could predict
Most South Africans expect
their spending power
to increase in the next year
how sales would be in 2013.
Although sales were as expected, several retailers
and suppliers within the industry have
told Sports Trader that this year was an especially
tough year, some even stating that it was
their worst year on record. Most respondents
(45%) had fewer customers than expected,
25% had more customers than expected and
30% the same number.
International expectations
According to a Deloite survey** of consumers
in 18 European countries, as well as South Africa,
consumers in many countries are optimistic
about the current state of the economy for
the first time since 2008. Consumers in most
other countries are more optimistic about the
current economy than last year, South Africans,
however, are more pessimistic with an
overall negative outlook of the economy.
After years of considerable growth, retailers
in the European Union (EU) have probably
reached a plateau, according to a report published
by IFH, the Cologne-based institute for
retail research. This could mean that in 2014,
European consumers might be less optimistic,
which could influence South African markets.
Spending trends
In our survey, 75% of retailers stated that
items sold at the middle range of prices were
popular during the holiday season. Functional,
yet expensive, items were also very popular,
with 45% of respondents stating that these
products sold well. This is likely due to formally
employed consumers being less affected
by economical woes and having more cash in
their pockets. According to the latest BankservAfrica
Disposable Salary Index (BDSI) disposable
income increased by 7.6% throughout
the year, up to September 2013.
Lower priced products did not sell very
well, with only 20% of respondents saying that
it sold well in their stores. This could either
mean that South Africans are starting to spend
more on their gift purchases — or that low income
consumers simply didn’t have the money
to buy sport, outdoor and lifestyle items.
The Deloite survey determined that the
average budget per gift for South Africans in
2013 was R310. It should be noted that the
Deloite survey was an online survey, so most
of the respondents would be representative
of the upper and middle class customers. The
relatively high average budget per gift means
that functional sport and outdoor products,
such as clothing and footwear, were within
December sales growth 2010-2013
0.61
0.6
0.59
0.58
0.57
0.56
0.55
0.54
0.53
0.52
0.51
2010 2011 2012 2013
Expectations of December sales
0.6
0.55
0.5
0.45
0.4
0.35
0.3
2010 2011 2012 2013
Fig 1 (far left): The December sales growth
reported by respondents to the Sports Trader
survey improved in 2013, after a sharp
dip in 2012.
Fig 2 (left): In 2013 retailers responding to
the Sports Trader survey expected that pre-
Christmas sales would improve.
Fig 3 (right): The import value of sporting
goods in the 3rd quarter, when most Christmas
and January goods will be imported,
have been rising steadily since 2011.
Sports Trader :: 2014 March