Uptick in trade recorded
Small businesses buck downward trend of economy, raking in cash over festive season
SMALL retailers bucked the general downward trend of the economy and showed an uptick in trade during the festive season, according to a snapshot survey of small business carried out during the the last quarter of 2019.
This boost occurred despite data from the SA Chamber of Commerce and Industry (Sacci) showing “lacklustre business confidence” in December.
The Yoco Shop the Streets survey carried out during quarter 4 canvassed nearly 1 000 shoppers and small business owners across the country. It found, “shopping at local businesses during the festive season has a major impact on their success, and on the lives of their employees and the other local businesses they support”.
Brand marketing manager at Yoco Yudhvir Ranchod said, “Consumers’ response was overwhelmingly positive; 99.8% of shoppers value the contribution of small businesses in their community.
“The vast majority of small business owners put in more work during peak season – 81% work overtime, with 52% working more than 10 extra hours each week.”
At the same time, however, a statement on the Business Consumer Index (BCI) from Sacci said, “Although the BCI remained virtually unchanged at 93.1 in December 2019 compared with 92.7 in November 2019, the BCI was 2.1 index points below the level of 95.2 recorded in December 2018.
“The BCI declined from an average of 95.5 in 2018 to 92.6 in 2019. The composite BCI stood its ground in December, but some sub-indices were quite inconsistent during December.”
Consumer confidence surveys provide regular assessments of consumer attitudes and expectations and are used to evaluate economic trends and prospects. The surveys are designed to explore why consumer expectations change and how these changes influence consumer spending and saving.
Senior FNB economist Siphamandla Mkhwanazi said, “Consumer sentiment remains depressed on the back of weak economic growth, record-high joblessness and Eskom’s ongoing electricity supply crisis and financial woes.”
As the battle to survive as a bricksand-mortar retailer gets tougher, businesses that are too slow to adapt to a digital world have a tough road ahead.
Speaking after Monday’s announcement that Massmart would begin closing 34 unprofitable stores, comprising 23 Dion-Wired and 11 Masscash stores, economist Mike Schussler said, “The economy is in decline, making it very difficult for all, including retailers. We are going to see more of this. We had Edcon doing the same and many other clothing retailers. It’s also evident in other sectors such as toy stores. Also, internet shopping is making big inroads in many of their areas.”
Massmart director international corporate affairs global communications Pedro Mucciolo said the move to close down the shops, “follows a recent assessment of the overall performance of the group’s store portfolio that highlighted persistently under-performing stores, unlikely to respond to turnaround initiatives”.