South Africa, 22.06.2023
South Africa’s technical goods sector continues to feel the aftershocks of the looting and rioting in Gauteng and Kwa-Zulu Natal in July, with sales of televisions and fridges declining in the week of 8-15 August 2021. That’s according to a GfK Lighthouse study of the impact of the unrest on technical goods sales in South Africa.
GfK’s market performance index uses point of sale data to benchmark weekly sales of key technical consumer goods categories following the unrest against average weekly sales in the first half of the year. The index indicates that overall technical goods retail performance in Kwa-Zulu Natal has yet to reach its pre-unrest levels, despite a near-immediate bounce-back after the looting.
Across all 12 product categories tracked in the index, Kwa-Zulu Natal accounted for 14.8 percent of the total South African market in the 8-15 August week, still 2.2 percentage points below its usual contribution. While product categories like washing machines, printers, media tablets and vacuum cleaners are performing at or above the weekly benchmark, sales of fridges, routers and televisions are down.
Says Nicolet Pienaar, Head of Market Insights at GfK South Africa: “A month after the looting, the South African technical consumer goods market is still feeling the after-effects. While Kwa-Zulu Natal is seeing encouraging recovery in sales of IT and telecoms products — perhaps due to consumers wanting to keep safe and stay home — we’re seeing countrywide week-on-week declines in fridge, televisions and washing machine sales.
“This is the direct result of the destruction of key manufacturing facilities as well as the ransacking of inventory from warehouses in Kwa-Zulu Natal, compounding existing component and product shortages due to COVID-19. We’re expecting that fridge, televisions and washing machines will continue to feel the pinch for most of the year, as manufacturers work to fully restore their supply chains.”
Pienaar says that the rapid recovery in the smartphone sector in Kwa-Zulu Natal can be attributed to how fast mass market retailers restored trade after the looting. By contrast, routers are mostly sold through network operators, which have not managed to get their franchise stores up-and-running as quickly.
Looking at some specific categories in the Index for 8-15 August:
Says Pienaar: “Our point-of-sale data not only shows that Kwa-Zulu Natal has some way to go before returning to normal trade performance, but that technical goods retailers will feel the lingering effects of the unrest for months to come. Brands that want to win in this volatile environment need up-to-the-minute consumer and market insight to make wise pricing and promotions decisions that enable them to optimise revenue and market share.”
For more market intelligence, access the GfK Lighthouse reports here: https://hubs.la/H0VXQd20.
The article is written by Nicolett Pienaar, Head of Market Insights– South Africa, GfK
About the GfK Lighthouse study
The results of the Lighthouse study are based on GfK’s market performance index which uses point of sale data to benchmark weekly sales of 12 key technical consumer goods product categories following the unrest against average weekly sales in the first half of the year. GfK calculated the average sales of weeks 1 – 20 of the year and benchmarked the following weeks’ performance against that average.
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