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Cape Town - This month, consumers can expect hefty price reductions at sales, especially in the case of luxury goods.
It's time for the post-Christmas clearances, and red sale signs at well-known stores like Stuttafords, Truworths, The Body Shop and Queenspark are already drawing buyers.
End-of-season sales are a normal occurrence as shops try to get rid of excess stock before unpacking the next season's products.
Stanlib chief economist Kevin Lings says retailers manage the sales according to their stock levels, but the economic downturn will certainly have an effect on the extent of the discounts offered this year.
There are always reductions over this period, but the amount of discount offered depends on the season's sales. Before Christmas reduced prices were already offered, but the new reductions will be bigger.
Retailers were not very optimistic ahead of the recent festive season. But Lings says Christmas sales appear to have been somewhat better than retail groups originally expected.
Consumers however spent their money on smaller, more practical gifts rather than expensive items.
For this reason the more luxurious shopping centres were harder hit and luxury goods are expected to be on sale at big discounts.
According to Quinton Ivan, a retail analyst at Coronation Fund Managers, the pressure on retail groups over the holiday period was exacerbated by the December holiday starting a week later than it did last year.
He reckons that this probably had a stronger impact on sales at shopping centres at coastal holiday destinations. If sales for the first week of December are compared with the same week in 2008, we will probably see that trading was worse.
Dennis Cope, head of finance at Pick n Pay, says consumers can expect an increasing number of promotions at reduced prices over the rest of the year against the background of the coming World Cup soccer tournament.
Lings reckons that consumer expenditure will improve steadily in 2010. Job certainty, lower interest rates and the soccer tournament should bolster consumer expenditure as the year advances.
- Sake24.com
For more business news in Afrikaans, go to Sake24.com.