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Easter trade predictions: Green shoots for innovative retailers

South African retailers are set for a strong Easter trading season, with general dealers, clothing and textiles stores, as well as specialist food, beverages and tobacco retailers expected to be among the strongest who will gain.
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The 2022 Easter trading period will stretch over approximately 35 days, and is forecasted for a 6.9% year-over-year increase in retail sales, according to the latest Easter Retail research study released this week by Capital Connect, the fintech business funding division within The Connect Group.

The growth prediction implies that economic recovery is gaining traction, despite the perfect economic storm which could be to the benefit of retailers with the right strategies to make the most of these green shoots, states Capital Connect.

The Easter Retail research study, conducted by the Bureau of Market Research, 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. However, not all retailers will benefit equally.

According to the Bureau of Market Research, Easter trade will impact different segments of retail in the following ways:

• General dealers generally benefit from Easter sales and this year is expected to be no different. With high unemployment and consumer income under pressure due to the perfect economic storm, much of that spend will come from consumers buying necessities in bulk during sales and promotions.

• Retailers of food, beverages and tobacco in specialised stores have experienced volatile Easter trade since the pandemic started, and this as a result of alcohol and beverage bans. This year, however, those retailers with strong confectionary and deli offerings are expected to do well.

• Retailers of textiles, clothing, footwear and leather goods are expected to enjoy a seasonal boost due to workers buying clothes to take home for the Easter season, as well as buying end-of-season sales.

·• Retailers in pharmaceutical and medical goods, as well as cosmetics and toiletries enjoyed a boost in April 2020 due to panic buying. However, they do not customarily see a spike in sales over Easter. Hardware, paint and glass retailers also tend not to gain at this time of the year.

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

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

Retail agility

Steven Heilbron, CEO of Capital Connect, comments, “A strong Easter trading season will give South African retailers some respite in a year 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.”

Heilbron adds: “Whether it’s buying goods in bulk to create compelling specials for the price-sensitive shopper, moving into e-commerce and home delivery, or adding a deli and coffee shop to the mix, retailers can ignite growth in so many ways.”

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