Trends in jewelry in South Africa
Economic and social challenges remained in effect in South Africa at the end of the review period, leaving many people in the country facing mounting financial pressure. The impact of the 0.5% increase levied in interest rates in 2014, which brought the base rate to 5.5%, added further pressure to consumer spending as a dramatic slowdown was recorded in unsecured lending in South Africa over 213 and 2014 as the weak consumer credit environment placed substantial pressure on sales of jewellery through consumer credit.
The Foschini Group continued to lead jewellery in South Africa in 2013 with a value share of 5%, followed by Galaxy & Co with a 4% value share and Taste Holdings with a 3% value share. Foschini Group continues to benefit from the strong heritage of its jewellery divisions, which include leading jewellery and watch specialist retailers chains American Swiss and Sterns. The company’s store card facilities enable customers to pay for purchases in instalments and this has also played a major role in terms of ensuring strong growth for the company’s retail brands.
The economic and socioeconomic climate in South Africa is likely to remain unfavourable during the forecast period, with the recovery of the South African slow expected to be very slow and laboured during the forecast period. It is anticipated that rising numbers of South African consumers will find it increasingly difficult to obtain consumer credit during 2014 and this is likely to continue placing a major strain on disposable income levels, resulting in strict limits being placed on spending on all non-essential goods during the forecast period. The adverse environment in consumer credit in South Africa is unlikely to improve at any point over the forecast period and, as result, jewellery in South Africa is expected to witness declining value sales in constant 2014 terms over the forecast period.