With the increase seen in retailers offering extended specials over the course of the month or week leading up to Black Friday, FNB expects spend to exceed R3 billion over the Black Friday weekend as well as a significant shift towards digital payments. Picture Leon Lestrade / Independent Newspapers.
The shopping event of the season, Black Friday, is set to take place this week with consumers in the country looking for the best deals from retailers ahead of the festive season.
One of South Africa’s biggest banks, First National Bank (FNB) said it is anticipating its customers to spend over R3 billion.
FNB said on Monday that the improved economic landscape and sustained recovery in consumer income will likely boost sales on Black Friday and Cyber Monday compared to 2023.
The bank further stated that with the increase seen in retailers offering extended specials over the course of the month or week leading up to Black Friday, FNB expects spend to exceed R3 billion over the Black Friday weekend as well as a significant shift towards digital payments.
CEO of FNB Card, Senzo Nsibande said, “As we approach Black Friday, we are witnessing a convergence of factors that point towards a vibrant shopping season. Digital wallet usage is projected to surge by over 40% year-on-year, reflecting the broader trend of digital adoption among consumers. Online sales are expected to grow by more than 10%, indicating the increasing preference towards e-commerce platforms. Conversely, traditional in-store sales and cash usage is expected to decline.”
The bank’s data showed that while categories like electronics and household items traditionally dominate Black Friday sales, there is notable growth to be seen in other sectors such as travel-related spending.
On the acquiring side, FNB Merchant Services recently processed 18.4 million on general spend transactions over the course of October 2024 which is approximately 400 000 more than what was processed the prior year on Black Friday at 18 million.
FNB said that this early indicator led to a positive outlook with an estimate of 19.5 million transactions expected to be processed by FNB Merchant Services this Black Friday.”
The bank said it was encouraging to see retailers and consumers embrace alternative ways of shopping.
“As a financial services provider, we offer several ways for our customers to shop conveniently and safely on their debit, Fusion, credit, and virtual cards on the FNB App with the virtual card being the safest way to shop online thanks to the dynamic CVV functionality," Nsibande said.
“We also believe that several economic factors are contributing to the positive outlook for Black Friday 2024. Unlike last year, this year's Black Friday will fall after payday for many South Africans, potentially boosting spending power. Moreover, reliable power supply is expected to facilitate smoother shopping experiences, both online and in-store,” Nsibande further added.
Small businesses, which is often described as the lifeline of the South African economy are also set to benefit from Black Friday and Cyber Monday.
SME services provider Lula said that three things have benefitted businesses for this year’s Black Friday event, being the ongoing absence of any load shedding, the decision by S&P to increase the country’s credit rating, and last week’s 25 basis points cut in the repo rate.
“After years of interest rate hikes starting way back in 2021, the SME space can now finally take a breath. Things are starting to look up and it does appear that all conditions are present for a very prosperous business period for small businesses,” Chief Risk Officer at Lula Garth Rossiter said.
“Small businesses have been hampered by very difficult trading conditions for longer than anyone would like to remember. There is reason for optimism thanks to this year’s lack of load shedding combined with this weekend’s good news about our credit rating and today’s repo rate cut,” he added.
S&P Global raised the outlook on SA’s rating from stable to positive, giving a nod of approval to the government of national unity’s reform agenda.
“Consumers should feel enormous relief after the announcement as this will reduce some of their debt burden and give them extra cash in their back pockets going into the festive season. Small businesses are still the lifeblood of our economy and we expect they will make full use of these favourable conditions and improving consumer confidence,” Rossiter said.
BUSINESS REPORT