Steven Heilbron | CEO | Capital Connect | mail me |
Conventional wisdom is that winter is one of the weakest periods for retail trading in South Africa. However, a big data analysis we commissioned shows that retail sales tend to pick up in winter after the quiet autumn months.
Research* conducted finds that retailers can profit by stocking up on pharmaceutical goods, winter clothing and certain foods and beverages.
Unpacking the analysis
This analysis breaks down performance of retail sub-sectors for winter 2024 as follows:
- General dealers historically see a rise in winter sales compared to earlier parts of the year. They benefit from customers buying hot beverages like coffee, tea and hot chocolate; vegetables and meats for soups, stews and other hearty meals; clothing items like sleepwear, winter wear and warm children’s clothes; blankets and fleeces; cold and flu medicines and over-the-counter treatments; vitamins and immune boosters; and certain small appliances like heaters and toasters.
- Food, beverage and tobacco specialised stores also generally experience some growth in the winter months compared to the first quarter of the year. Like general dealers, they benefit from sales of ingredients for hot beverages and nutritious, affordable winter meals.
- Pharmaceutical, medical goods, cosmetics and toiletries dealers profit from the cold and flu season. Products that sell well include prescription medicines, cold and flu medicines, throat lozenges, skin creams and lotions, moisturisers, cough syrup, pain relievers, nasal spray, immune system boosters, clinic services and hair dryers.
- Textiles, clothing, footwear and leather goods dealers tend to underperform in winter months compared to other times of the year. Sales tend to pick up for thick socks, winter boots, hoodies, jerseys, sweatshirts, tick cloth trousers, long sleeve shirts, slippers, warm sleepwear, as well as ladies and children’s winter clothing. However, local retailers are losing out on sales to international brands.
- Household furniture, appliances and equipment dealers experience little growth in the winter months compared to the first quarter of the year. But there are opportunities to drive sales of heaters, carpets, cookers, ovens, hair dryers, vacuum cleaners, small kitchen appliances, toasters, grills, roasters and coffee machines.
- Hardware, paint and glass dealers generally experience low growth in the winter months. The only products that are standing out as strong winter sellers are firewood, heaters, grillers and some DIY products.
Creative promotions & strategic stock purchases
Retailers that want to grow and thrive need to maximise their opportunities during every season, even those that are traditionally quieter trading periods.
But to win market share at a time of the year when there aren’t many big holidays and when people are staying indoors, they’ll need to be innovative to move the needle. Creative promotions and strategic stock purchases can give retailers an edge during winter.
Some ideas they can consider include:
- Host winter-themed events such as cooking classes for winter recipes or wine tastings featuring robust red wines to boost sales within the supermarket and liquor verticals.
- Develop winter-themed promotions with attractive deals on seasonal essentials like winter woollies and soup mixes.
- Create bundles such as soup ingredients or flu-fighting kits—to increase basket sizes.
- Offer a warm refuge create an enticing space for customers to linger by offering soups, hot chocolate and a fire or heater in your coffee shop or bistro.
In conclusion
Whether retailers want to invest in winter advertising, buy products in bulk at reduced rates, expand into new channels, or revamp their stores, they need access to fast, reliable finance to execute their growth strategies, so that they do not miss out on golden opportunities. With us, retailers can apply for unsecured short-term opportunity capital up to R5 million from our app and the funds will be in their bank account within 24 hours.
*Research conducted by the Bureau of Market Research (BMR). The BMR analysed datasets including StatsSA retail data, SA Reserve Bank National Accounts data, the Living Conditions Survey of StatsSA and other big data sources to determine which products sold well during the winter months of 2015 to 2023 and which products will sell strongly in winter 2024.