Twin peaks of Black Friday and Christmas a challenge for retail - Clicks CEO

Cape Town - The challenge for the SA retail sector is how to manage what can be described as the two twin peaks of Black Friday and Christmas in an environment where consumers are still constrained and looking for value, David Kneale, CEO of health and beauty retailer Clicks, told Fin24 on Monday.

Kneale said Black Friday has become quite a significant event on the SA retail calendar due to consumers liking the prospect of getting good deals.

"I think Black Friday brings forward expenditure from December to the end of November. So, in effect it means the Christmas season has two spikes: one at the end of November (Black Friday) and then one a week before Christmas when schools have closed and people are on leave," said Kneale.

"Our strategy has always been promotionally led. So, we have offers that run throughout the period. We don't put in many additional offers for Black Friday. We have a an 'offer of the week' that kicks off on Black Friday and we has a promotional programme through November and December."

In his view, the retail challenge of dealing with these two "twin peaks" is about managing your supply chain, staffing and store opening times to maximise the benefits to be derived.

As for the year going forward, Kneale said in general, consumers are still under pressure.

"I think there is some more political confidence after the ANC elective conference, but I think that has yet to filter down to real disposable income for consumers. We see consumers still pressured financially, but ours is a resilient brand as we have demonstrated," he concluded.

Earlier on Monday Clicks announced in a trading update that it has continued a strong growth trend in the 20 weeks to mid-January 2018. Sales increased by 14.2% over the period.

Clicks reported real volume growth of 4.8%. Comparable store sales grew by 7.5% with selling price inflation averaging 2.7% over the period.

According to Kneale, sales continued to be driven by the group's strong promotional offer, with the "3 for 2" promotion on Christmas gifting again proving highly attractive.

Clicks Group’s total turnover for the period increased by 11.3% to R11.1bn. Retail sales increased by 13.0% and by 6.7% on a comparable store basis, with selling price inflation of 3.0%. UPD, the group’s pharmaceutical wholesale and distribution business, grew turnover by 11.6%, ahead of selling price inflation of 6.2%.

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