Festive season – a jackpot for SA retailers?
According to Statistics SA, the months of October, November and December account for around 29% of annual sales – indicating clearly just how important the last few months of the year are for retail sales.
Retailers who have traded in a tough economy all year, are justifiably gearing up to cash-in over the upcoming festive season as consumers get ready to go on holiday and shopping sprees.
Given that about 50% of all these transactions will be done in cash, the festive season certainly is a potential cash jackpot for SA retailers. Interestingly, trading with cash has benefits for retailers beyond the fact that they have immediate access to their takings. Chief among these is that cash transactions are cost effective and that businesses are less likely to suffer losses from cash crime than from other payment methods. Figures released by Sabric earlier in 2019, indicate that the impact of online and card fraud is four times that of cash crime. In 2018, over R1 billion was lost to digital fraud – this included digital banking, credit and debit card, as well as card-not-present fraud.
Retailers must be prepared
The festive season brings with it both an increase in transaction volumes and value, thus a spike in cash in circulation. Steven Heilbron, CEO of Cash Connect, SA’s leading provider of cash management and capital solutions, says retailers have to be prepared on both counts.
“When consumers cut back on their spending – as they have been doing this year – retailers’ cash flow comes under pressure,” says Heilbron. “As a business that exists to enable the retail community, we understand the importance of cash flow to ensure business continuity. This prompted us to pioneer an alternative financing offering, designed specifically to give retailers access to quick, reliable capital that empowers them to stock-up by making use of bulk purchases at discounted rates.”
Cash Connect spokesperson, Lauren Rayne, adds that it is inspiring to see what clients accomplish with operating capital that enables growth without crippling a business with debt. “We see business owners using their cash injection to expand their business operations by, for example, adding a coffee shop or car wash.”
In terms of dealing with increased volumes of cash, Rayne warns that peak trading times, such as the festive season, are as much a jackpot for criminals as they are for retailers. “We urge retailers to invest in an automated and robust cash vault that can protect your cash, staff and customers, and deter and deflect any potential criminal activity,” she says.