Given the recent fluctuation Rand-US dollar exchange rate, MyGaming asked physical and online gaming and tech retailers if their prices will be influenced.
Physical retail channels
“In the short-term there is no effect on pricing, however, if the currency weakness persists then there will be upwards pressure on pricing,” said a spokesperson for Mass Discounters (Game, Dion Wired). “Typically both vendors and retailers carry very few weeks of supply on electronics and therefore this will be one of the first categories to see the effect of the currency depreciation.”
Mass Discounters explained that price increases will be the last resort over any other solution for the retailers. “Typically in this environment both retailers and suppliers alike are hesitant to move pricing upwards and will only do so when all other options have been exhausted. Suppliers will be expected to absorb some of the effect and retailers would do the same and so ultimately consumers will typically not see the real or full impact of the currency weakness in the final retail pricing.”
“Where long-term fixed contracts are in place the prices will be slower to move but these are less typical in the electronics arena. As a value retailer Game will consistently look at all possible ways to ensure we continue to hold and drive down pricing to ensure we remain true to our position of saving customers money so they can live better,” said Mass Discounters.
On the other side of the retail world, online retailer Kalahari also gave some insight into the current economic pressures.
“We source our gaming products from local suppliers, and they will be increasing their pricing due to the current exchange rate,” said a Kalahari rep.
“Since our pricing is driven by the above, we will unfortunately have to increase pricing accordingly. That said, we will however continue to offer as low as possible pricing to our customers.”
Distribution and Manufacturing
Electronics distributors and manufacturers echoed the same sentiments as retailers, telling MyBroadband that the affects will be seen across the industry.
This is because the majority of electronics imports are US Dollar dominated, the weakening of the Rand-Dollar exchange rate has a domino effect on the prices of gadgets such as personal computing devices and televisions, Mustek said.
In a recently released statement, The Notebook Company warned that they would have to increases prices immediately by as much as 10% as they can no longer absorb the “currency hits”.
The Notebook Company said that it expected many technology distributors in South Africa are going to have to increase prices across the board.