Retail and Shopping Centres 2017

Source: Market Decisions

The Economics of Retail

The SACSC (Southern African Council of Shopping Centres) last completed the Shopping Centre Directory in 2014-2015. The directory is updated every two years, and the next one will be published in September 2018. This directory serves to classify and quantify the types of centres present in Southern Africa. This information is relevant to a variety of industries who are interested in the growth and development of centres in the growing continent. The amount of retail space available, the main anchors and the location of shopping centres play a big role in planning and implementing projects and creating research for the future. 

According the South African Reserve Bank, the real GVA by the secondary sector contracted by 4.9% in the first quarter of 2018 following an increase of 3.1% in the preceding quarter. Real output shrank in all three of the subsectors, i.e. manufacturing, electricity, gas and water as well as construction.


Currently, Statistics South Africa collects data from a sample of retailers and the results are published monthly.


More recently, Black Friday has had an impact on South African Retail Sales, as seen from the growth in November.
According to Mastercard Spending Pulse, South African consumer spending showed a healthy improvement over the festive season, with retail sales volumes rising 3.8 percent year-on-year after removing the effects of inflation. This marks the strongest monthly performance for South African retail spending since May 2013.

The latest Spending Pulse South Africa report details holiday shopping in December 2017 and covers retail sales across all payment types, including cash and cheque.

According to the report, retail sales for December 2017 grew 7.5 percent year-on-year. Statistics South Africa recording this as 7% in current terms and 5% in real terms.

The future of retail sales over the next few months will be impacted by the rise in petrol prices, the high unemployment and the technical recession that South African finds itself in.

The documentation and classification of these shopping centres, from the neighbourhood centre to the super regional nodes, all form a general view of how healthy the retail sector is faring. The ability to compare them to other centres around Africa also provides valuable market related research.

Shopping centres in South Africa

This edition of the Shopping Centre Directory boasts 2100 centres that have been updated with the most recent information. Each centre has a comprehensive set of available information on the following details:

  • Shopping Centre Name
  • Physical Location
  • Postal Details
  • Classification
  • Gross Leasable Floor Area in square metres 
  • Centre Manager Details
  • Shopping Centre Website
  • Leasing Company Details   
  • Marketing Company Details               
  • Owner and Name of Holding Company (if applicable)
  • Name of Developer              
  • Year Developed and Year Last Refurbished (if applicable)
  • No of Retail Floors
  • Latest Annual Foot Count
  • No of Shops           
  • Main Anchors       

This information allows retailers to communicate with each other, share ideas and learn. The directory is available for individual and corporate members. Members of the SACSC are involved with retail, property investment, property financing institutions, managers/management companies, developers, brokers, property professionals, consultants, retailers, tenants, researchers, and networking. This information is not only relevant for local members but extend to the global community as well as the rest of Africa.


South Africa has a highly developed shopping centre industry. Over the years, the concentration of centres has extended to the other provinces. Gauteng probably has more shopping centres than income, but it does have a high inflow of shoppers from outside the province including the rest of Africa. Two other areas remain tourism hotspots: Cape Town and Durban.

PROVINCE

# Centres

GLA

Population

Adult Pop

Income

Eastern Cape

116

1,432,123.3

6,916,200

4,741,002

244,821,000

Free State

78

872,010.3

2,817,900

2,113,739

161,829,000

Gauteng

777

10,838,143.8

13,200,300

10,170,303

1,301,496,000

Kwa-Zulu Natal

284

3,336,686.4

10,919,100

7,418,984

452,579,000

Limpopo

124

1,350,430.3

5,726,800

3,945,376

149,745,000

Mpumalanga

120

1,579,793.0

5,283,900

3,110,482

206,747,000

North West

95

1,093,892.2

3,707,000

2,676,101

187,234,000

Northern Cape

35

274,351.9

1,185,600

917,034

70,952,000

Western Cape

337

3,622,555.1

6,200,100

4,627,601

666,313,000

Total

1966

24,399,986.3

55,956,900

39,720,622

3,441,716,000

Source: SACSC; StatsSA; Unisa BMR

 

For the next year, 67 centres are proposed, with a combined total GLA of 1,782,950m2. There is often talk about over-supply of retail. In the case of the fastest growing areas in Gauteng, i.e. Midrand, Greenstone, North Western suburbs, the competition is tough and until the residential areas peak, some of the centres will be under pressure.

Pairing Shopping Centre Data with Geographical Mapping Data
Mapping software allows the information to be displayed in a spatial and visual way. Research opportunities also arise when this data is paired with other information, such as Census, Population, Household Income, etc. Similarly, the ability to plot the information into a mapping system helps display valuable information in a geographical layout. This visual way of looking at data allows one to see patterns and trends easily with detailed maps and graphics which ultimately enables a more informed decision and capitalises on untapped business opportunities.

Retailers through the world map their customers and track buying behaviour. Social Media has become an important part of the entire customer behavioural focus and it would do well for centres to follow suit.

The retail expansion in Africa is evident from the graphic below.

the future success of shopping centres and retail
South Africa has a significant unemployment problem, compounded with very poor training in many spheres, especially in retail. The industry should take the initiative to address the issue of youth employment by:

  • Setting up quality apprenticeship programmes
  • Making retail fashionable and vibey
  • Helping young people understand that retail is a way to harness entrepreneurship
  • Moving them along to shopping centre marketing and careers within the industry
  • A major start would be with regional shopping centres
  • Mentoring is strongly required in the industry

Shopping centres are coming under pressure due to higher than average vacancies and some of the centres are converting retail to other types of uses. Anchor tenants in a shopping centre are also taking strain and in recent research conducted by Market Decisions, our visit to a high-end supermarket made us aware that managers need to be in touch with and properly trained with the geographical location of the store. Furthermore, they need to understand a multicultural target market.

The type of behavioural training required is:

  • Helpfulness, friendliness and courteousness
  • Compassion for customers who speak a different language
  • Punctuality
  • Interviewing new recruits in middle management position could occur before one even gets to the interview. Major retailers are now looking at the social media prior to even speaking to new recruits
  • Understanding manners of locals, foreigners and aligning oneself to be an international player