On the day after Thanksgiving, known as Black Friday, retailers in South Africa are hoping to recover earlier losses and boost sales during the Christmas season. CNBC Africa spoke with Grant Nader, Portfolio Manager at Benguela Global Fund Managers, to discuss which listed companies are best positioned to capitalize on this shopping extravaganza.
NASPERS, the conglomerate behind Takealot, is expected to see positive outcomes on Black Friday. As an e-commerce platform, Takealot has the ability to move significant volumes of inventory, making it an ideal channel for retailers looking to recoup lost sales and clear out overstocked items. While NASPERS’ overall economic impact is relatively small, Takealot’s dominance in the South African market makes it a crucial player for local sellers and distributors.
The Foschini Group, which includes various brands such as Foschini, Sportsscene, and @home, is well positioned for success on Black Friday. With its extensive range of products, the company utilizes data analytics and strategic pricing to attract customers and increase sales. Additionally, Foschini’s inventory and promotional environment make it an ideal candidate for shoppers seeking bargains.
Woolworths, known for its focus on food retail, also participates in Black Friday. However, the company is careful to maintain its margins and does not heavily discount its products. While demand is still expected, Woolworths is not likely to undercut its margin gains in the fashion, beauty, and homeware sectors. The company’s approach reflects its commitment to maintaining profitability while meeting customer expectations during the shopping event.
Other retailers, such as Truworths and Mr. Price Group, have their own strategies for Black Friday. Truworths relies heavily on credit-based sales, while Mr. Price Group has recently acquired Studio 88 to expand its offerings. Both retailers are well positioned to attract customers and increase sales during the shopping season.
In terms of overall winners on Black Friday, Grant Nader suggests that Shoprite may come out on top in the grocery sector due to its focus on discounting and gaining market share. For clothing brands, Foschini Group and Mr. Price Group are likely to see success, thanks to their broad range of products and competitive pricing.
As Black Friday kicks off the Christmas shopping season, South African retailers are hoping to make the most of this opportunity to boost sales and recover from the challenges of the past year. While each company has its own approach and target market, they are all vying for the attention of bargain-hunting consumers in a highly promotional environment. Only time will tell which retailers will emerge as the true winners of this annual shopping frenzy.
