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Retailers and the leisure industry are planning to tempt consumers to spend with festive giveaways in a bid to win them over as the economic slowdown begins to bite.

The country’s coastal areas, which rely heavily on the busy summer season, are facing the slowest summer holidays in recent years, analysts predict.

And with fears that the worst is yet to come next year, many holidaymakers’ hopes of travelling to the coast this December may already have been dashed.

Economist Mike Schussler said domestic tourism arrivals via air in Durban and Cape Town have declined since April.

“The tourism industry did not expect this decline just ahead of the World Cup, but the turmoil in the world economy, combined with our own slowdown, has affected hotels, airlines, car rental companies and travel agents,” he said.

“I think you’ll still get big special offers in the next few months as airlines and hotels try to make up the numbers, but consumers are under stress and have stopped spending on things they don’t really need.”

Retail companies are set to increase the number of promotions this festive season compared to the same period last year in a battle to retain their customer base.

A recent survey showed that consumers were now keen to curtail their festive spending more than ever.

This means the number of promotions over this festive season are likely to increase significantly compared to the same period last year, analysts say.

But the Festive Retail Trends Survey released by audit firm Ernst & Young this week predicts sales volumes will decline at the fastest rate since 1992.

“Based on the official statistics, the retail sector is already in recession, having suffered two consecutive quarters of negative growth,” said Derek Engelbrecht, the retail and consumer products director at Ernst & Young.

“The survey suggests that the recessionary conditions will continue through to the first quarter of 2009.”

Nick Badminton, CEO of Pick n Pay said the company recognised the need for customers to get exceptional value this Christmas.

“Pick n Pay has put every effort into securing the lowest possible prices for consumers in both food and general merchandise,” he said.

“We are continually checking prices to make absolutely sure that we are the most competitively priced retail chain in South Africa over a basket of goods, and we use third-party auditors to confirm all our pricing.”

Pick n Pay’s Christmas shopping traditionally gathers real momentum in the two weeks prior to Christmas, when people start buying food for special meals.

The biggest volume of sales is in the two weeks leading up to Christmas, added Badminton.

“Shoppers should look out also for some very competitive prices in toys, outdoor living and Christmas decorations,” he said.

The Shoprite Group said its planning was aimed at enabling shoppers to have the Christmas they are accustomed to despite their disposable income being tighter.

“Shoprite and Checkers stores have planned well in advance to secure significant stocks of toys, quality glassware, gift items and traditional festive fare at lower rates,” the company said.

Woolworths said: “We have sharpened prices considerably in core categories, and our basic lines are now extremely competitively priced.”

Robyn Christie, CEO of the Association of SA Travel Agents, said this holiday season would not be like any others in recent years, which were regarded as a boom period.

“In our forward bookings we have definitely seen a downturn,” she said.

“This had little to do with the cost of flights or packages but more to do with what it will cost holidaymakers when they get to their destinations.”

Christie said that while South African travel was going through a rough patch, there were a number of affordable opportunities introduced by airlines and holiday resorts to try to meet the consumers’ needs during this time.

Comair, the operator of British Airways and kulula.com, said it had seen an overall dip in the traffic to coastal areas of nearly 10 percent compared to the same time last year.

Schussler said the Eastern Cape appeared to be bucking the trend, as East London saw only a 0,4 percent decline in October but a 6 percent decline in September.

Port Elizabeth Airport had only a 1,4 percent decline in October 2008 compared to October 2007.

“Basically, in the last few months, air passengers have been in decline,” he added.

“Petrol sales have declined by more than 10 percent, so I don’t think more people are driving to their destinations.

“This is likely to continue well into next year unless we get major rate cuts.”