As 2025 draws to a close, South Africa's retail sector is showing signs of cautious optimism. With inflation expected to average 3.2% (its lowest since 2006) and the prime interest rate down to 10.25%, consumer purchasing power is slowly improving.

The early results from recent spending sprees are also encouraging. Payment data from this year's Black Friday suggests a strong surge, while broader holiday-season retail spend is projected at between R145-billion and R153-billion, a 5-10% increase on last year.

Yet, even amid the improved outlook, consumers remain value-conscious. About 69% say they choose items they will genuinely use — signaling a shift toward purposeful, need-based shopping.

In parallel, digital convenience is shaping buying behaviours: 57% of shoppers reportedly begin their purchase journey online, comparing options digitally before potentially completing the purchase in-store or online.

This leaves marketers and retailers with the following implications:

  • Prioritise Value and Purpose: Promotions should emphasise utility and long-term value. Campaigns around "practical gifts" or "useful home and lifestyle upgrades" are likely to resonate.

  • Leverage Omnichannel Behaviour: With hybrid shopping patterns — online research followed by offline purchase (or vice versa) — brands must ensure consistent messaging and seamless experience across mobile, web and physical stores.

  • Offer Convenience and Flexibility: Fast delivery, easy returns and flexible payment methods such as "buy now, pay later" can significantly influence conversion, especially under economic stress.

  • Adapt Pricing and Promotion Strategies: As discount formats (private-label, promotions and value-oriented offerings) accelerate, especially in food and essential retail, marketers should consider bundling, private-label positioning, or budget-friendly ranges.

Despite economic headwinds, such as high household debt and income stagnation among them, the 2025 festive season may yet provide retailers and marketers a valuable opportunity. As consumers shop more selectively, brands that balance affordability, convenience and relevance, stand to win.

Additionally, marketers who closely track audience sentiment will be better positioned to respond quickly and effectively, as they stay  in the loop when consumer expectations shift toward value.

Trends into 2026 show that this is not just about holiday-season spikes, but about adjusting to a new normal of pragmatic, digitally-informed consumer behaviour.

 

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Looking for more festive season insights? Read ‘Tis the Season for PR: Everything You Need to Know About Publicity in December.

*Image courtesy of Canva

**Information sourced from TimeOut, SuperMarket & Retailer and The Media Online