SA Retail Trade Sales Forecast for 2012 Festive Season

Recent research shows December 2011 South Africa retail trade was up 12.8% on the prior December, however retail sales in December 2012 should increase between 7% and 9% – slightly above inflation – to levels between R80 billion and R82 billion, based on current prices.

The South African Council of Shopping Centre’s (SACSC) predicts that while retail trade sales growth will comfortably outpace inflation in December 2012, it is unlikely to reach the extraordinary peaks of last year’s festive shopping month.

CEO of SACSC Amanda Stops says: “Our research by Dr Dirk A Prinsloo of Urban Studies shows December 2011 was one of the best December months since the high growth period of 2006. In 2011, December retail trade was up 12.8% on the prior December. However, retail sales in December 2012 should increase between 7% and 9% – slightly above inflation – to levels between R80 billion and R82 billion, based on current prices.”

The prevailing economic uncertainty in 2012 and non-retail consumer pressures are the main contributing factors.

“Uncertainty in international and local macro economies defines 2012. Most key indicators show no clear upward or downward trend. They are moving sideways, clearly displaying much uncertainty,” says Stops.

“Hefty inflationary pressures from school fees at 9%, petrol at 17%, electricity at 10% and water and services at 9%, are all placing strain on consumers. Public transport is 15% higher than a year ago, hurting the commuter market. Unsecured loans also increased by 21% during 2012.”

On the other hand, Stops notes consumer inflation on clothing, household products and homeware is much lower than the current inflation rate, making these mostly essential products attractive to consumers. For this reason, Stops says, it is likely that Christmas shopping will be focused in these categories, as well as home improvement products.

The plethora of new competing IT and electronics products will also prove popular on festive shopping lists, as prices have dropped substantially in most instances. This is especially true for high-quality cameras, e-readers, smartphones and tablets.

Most local festive shopping will be through traditional channels – in shopping centres and central shopping districts. E-commerce and smartphone retail applications have yet to gain significant traction.

“In South Africa we are two to three years behind what is already happening in the US and Europe for smartphone shopping. In the US more than 15% of all sales are already linked to e-commerce,” says Stops.

However, online and smartphone shopping are gaining importance as retail channels in South Africa. Well-known US department store Macy’s, and others, are making products available to South African shoppers in Rands with a six- to eight-day delivery, and local retailers like Mr Price are becoming decidedly more active in e-commerce.

“With Apple and Samsung selling millions of smartphones each month, South African retailers will have to move into giving customers apps instead of expecting them to work through websites,” says Stops. She also anticipates shopping, driven by input through social media, will also become much more attractive in future.

“Social media in South Africa is still in its infancy stage and high growth could be expected during the next couple of years,” says Stops.

Stops sees the rise of the social media manager in South Africa’s shopping centres. “They will be tasked with getting conversation going about different products in stores and for the shopping centre as a whole,” says Stops.

Source: fastmoving.co.za

Too Big To Fail Banks Turn To Ma And Pa Investor To Make A Buck

Banks such as Wells Fargo & Co, JP Morgan Chase & Co and Goldman Sachs, under pressure from a host of national and international laws meant to stop a repeat of the events of 2008, have now found themselves a new moneymaking opportunity:

You.

According to an article published today by Bloomberg.com, these global financial behemoths “have rediscovered the appeal of the mundane business of managing money for clients” and are looking to grab “market share” from such mutual fund superstores as Fidelity Investments, and Charles Schwab.

Unfortunately, what’s good for the consumer is unlikely to be good for the banks.

The vast majority of investors, from individuals trading at home to high profile mutual fund managers, will not beat the markets on a consistent basis. As a result, almost all of us are best off with a group of diversified indexed mutual or exchange traded funds and ones that come with low expense ratios.

But that ain’t what the bank is likely to be selling you on. That’s not where the money is unless your company’s name begins with the word Vanguard. No, the money is in getting naive customers to buy into actively managed funds where they pay as much in fess as possible. Performance is not the name of the game. As Bloomberg pointed out, more than half of Goldman Sachs’s actively managed mutual funds performed worse than their peers over both a five and three year period, with those of JPMorgan Chase and Wells Fargo only doing a little bit better.

So how exactly does a bank make a buck with such a host of sad sack offerings? Well, hello hard sell. For all-too-many customers, visiting the bank has become as fraught as stepping into an automobile sales room, with salesmen pitching them on this year’s hot model investment.

That’s how we’ve gotten such events as the New York Times’ summer reveal that JPMorgan Chase was putting pressure on their brokers to sell customers on sub-par but high fee funds to fellow Forbes blogger John Wasik’s excellent work detailing how the financial services industry is selling elderly security seeking men and women on so-called structured products. As Wasik wrote:

From a seller’s standpoint, bank lobbies are an ideal place for brokers to pitch these products. “Elderly people are often more comfortable with brokers who work in their banks,” says Geoff Evers, a Sacramento, California-based lawyer.

Before you say “call in the authorities” know it is unlikely they can or will do much about this. That’s because just about everyone selling you on an investment at a bank is, despite calling themselves by the high falutin’ term financial advisor, is nothing more than glorified broker, not bound by the fiduciary standard to place their client customers in the most appropriate investment but instead one that they simply deem suitable, a rule that gives brokers lots of latitude.

So why not change? Well, maybe the good folks at Wells Fargo, JPMorgan Chase and Goldman Sachs would like to take that one on. The Obama administration has been fighting for four years to get banks and other brokers to adhere to the fiduciary standard but has been stymied by financial services industry lobbying.

The banks claim that if they have to act in the best interests of their customers, they can’t afford to service a good chunk of them when they come in looking for help with, say, their Individual Retirement Account. Seriously. If a car mechanic publicly admitted to that business model, they would lose their clients mighty quick, but when it comes to our college and retirement savings, this sort of sentiment is just business as usual.

Forbes

How to keep a lid on debt during the holidays

MOST South Africans are looking forward to a break in December, and after a long, hard year feel they deserve to spoil themselves.

But beware of getting carried away and ending up with huge debt in the New Year.

Credit ombudsman Manie van Schalkwyk says: "By the time December swings around, many consumers feel they deserve to spend money on luxuries such as branded clothing and footwear or going on a much-needed holiday.

"But borrowing or cutting back on your credit payments to fund these can leave you with a nasty hangover come January."

Van Schalkwyk has this advice on how to avoid getting into, or further into, debt this holiday season:

* Be smart and do not let advertising deals draw you in. These campaigns are designed to manipulate consumers into spending more over the holiday period;

* Avoid buying from stores with limited return policies - you want to know that if you need to return the goods, you will be able to. Exchange policies are also not good because you still do not get your money back - you will have to swap your product for something else;

* Before going out and buying, take the time to compare prices between stores and on websites such as pricecheck.co.za;

* Work out how much the monthly instalment on your credit repayments will be, and don't forget to add in the interest;

* Do not borrow money to pay off debts;

* Be honest with yourself and your family about how much you can afford to spend over the festive season. Once you have calculated this amount, stick to it and do not overspend;

* If you get a bonus in December it can be very tempting to blow it, but remember January, with its back-to-school necessities, is just around the corner. Use all or some of it to cover these additional expenses;

* If you apply for a loan, be honest when filling in the affordability assessment;

* Be wary of offers for "cheap" short-term loans that require no credit checks as they may be loan sharks who will charge very high interest rates; and

* Instead of taking on more debt and paying interest on it, commit yourself to saving a little extra each month so you will be in a better position this time next year.

5 Tips for Negotiating with Your Creditors

During tight economic times, both individuals and businesses struggle to keep their heads above water financially. However, many people and companies alike do not know they can successfully negotiate with bill collectors and creditors to reduce payments and make arrangements that work for both parties. The following tips will give you successful negotiation strategies for a win-win solution.

Take Proactive Action

As soon as you know you will have problems making any payments, talk to the credit company to make a payment arrangement before they send the bill to collections. You will probably harm your credit by making late payments, but most companies hope to avoid sending the bill to collections as most charge a percentage of the amount collected. Collection accounts cause your credit score to drop even lower than if the original agency keeps working with you.

Pay What You Can

Look at your budget realistically and come up with a plan to pay your bills. Remember that a budget is a tool to serve you and help you stay on track financially. Only promise to pay what you can. Credit companies take a dim view of breaking payment agreements. It’s almost always better to negotiate a lower amount and pay the company more if you are able to do so.

Tell Your Story

As you talk about your situation, remain calm. You need to share some details of your story without drawing out the explanation. Tell the truth about your difficulties and explain what you plan to do to work out your issues. If you start to become angry or overly emotional, tell the collector you will speak with them later. Let them know you will record the conversation if needed.

Document Everything

Collectors might threaten you with a lawsuit, property seizure or garnishments. Know your legal rights. While most collectors practice ethically, some do make illegal threats. Written notes and documentation help you remember what the collector said to you. Take the collector’s name and identification number, if they has one, for further reference. Take notes, including times and dates. This will help you track what was said and focus on the conversation as you write. Sometimes companies promise you a reduced pay-off total. Ask to see it in writing before you pay anything. You don’t want any old balances to come back to haunt you months or even years later. Keep track of mail from your creditors.

Seek Help

Sometimes, you need outside help. While credit counseling is commonly associated with individuals who require assistance with getting their finances back on track, many companies offer credit counseling for businesses in need of the same. Make sure the company has been approved by the Better Business Bureau. If you do not qualify for debt assistance, you may need to contact a bankruptcy lawyer. In any case, he will tell you if a creditor’s actions are legal. If you do need to file bankruptcy, don’t beat yourself up over the situation. Do what you can to move forward and prepare for the future. Work to rebuild the credit of your business as soon as you feel comfortable doing so.