Welcome to our newsletter that provides commentary on major themes emerging from the Insights' dashboards. This month, we dissect November's Black Friday spending frenzy...
Black Friday has come and gone. The spending jamboree helps make November the second most important month in the retail calendar after December. In a handful of categories, it’s the most important month of the year.
With that in mind, it’s valuable to know which retailers are doing better than others, since they’re all competing for their share of consumers’ year-end spending.
We begin with a top-down view, looking at user spending by category, before focusing on the winners and losers during the month of Black Friday and two other significant observations that make November an even more noteworthy month for South African retail.
Wins for discretionary spending categories
Despite the November spending frenzy, the rate of annual spending growth by 22seven users in most retail categories is unchanged compared to last month. For example, spending in the Grocery, Pharmacy Retail and Eating Out categories grew at mid-single-digit rates, while the amount spent on Apparel was relatively unchanged compared to last year.
The most significant change in growth occurred in the Home category, which captures user spending at ~100 retailers across sub-categories spanning General Merchandise, Furniture & Homeware and DIY & Garden. User spending in these more discretionary categories has been in decline throughout 2023, but the rate of decline nearly halved during November. This improvement was mostly driven by better performance in the Furniture & Home sub-category.
Growth in spending by category (22seven users)
Black Friday winners and losers
We argued last year that a retailer’s Black Friday performance should actually be measured across the entire month of November because so much promotional activity takes place in the weeks leading up to the actual day (24 November this year).
The chart below shows the year-on-year growth for different retailers in November across the Grocery, Apparel, Home and Pharmacy categories. Boxer delivered the strongest improvement in the Grocery category, while spending at its big brother Pick n Pay declined compared to last November. 22seven user spending at Pharmacy retailer Dis-Chem increased faster than spending at Clicks.
The standout performer in Apparel was Shein (see the next section for more detail) while spending across the rest of the category increased at modest rates.
In the most discretionary category, Home, which includes electronics and furniture retailers where Black Friday discounts on big-ticket items can be more persuasive, @Home delivered a very strong performance. Spending at Takealot also increased – off a very high base in 2022 – to achieve its highest ever share of total spending in the category.
Annual growth in spending by category and retailer: November 2023
What’s so memorable about this?
Not much, maybe it’s just another month. Except that Shein and asap! (and their competitors) might be interested in some important milestones achieved during November…
We’re delighted you’ve read this far. But research is only valuable if it’s exclusive. To be fair to the retailers and investment teams who subscribe to Insights, we have to say goodbye before we get to the juicy bits. Contact us to find out how our research can help you: Simon Anderssen simon.a@22seven.com +27 84 730 0309
