Shopping centres and retailers report a tough year with consumers wanting entertainment, real value for money
Retailers and shopping centres throughout the country are reeling from a challenging 2017, says the South African Council of Shopping Centres (SACSC). Despite this, retailers and shopping centres garnered support from consumers over the recent festive season.
Looking back at 2017, stores closed, it was the end of an era for a respected brand store and many local retailers were on the brink of closure. The last weeks of 2017 also affected retail, fuel price increases and the ANC elective conference among the disruptive forces that plagued the retail and shopping centre industry.
Despite this, each mall, shopping centre and retailer – both bricks and mortar and the ever-growing online – offered something unique to the consumer.
The council spoke to Dawie Roodt, chief economist for the Efficient Group, who said more money was spent over the 2017 festive season compared with the rest of the year.
“Consumers spend more over the festive period, not because of improved circumstances but mostly because of factors such as better marketing and relatively low interest rates.
New tranditions, including Black Friday, also contributed to the spending binge.”
Roodt said 2018 might not be different to 2017 in terms of the economy. “Although the past festive season may have been good, last year as a whole was quite dismal. The fundamental reason for this is simply weak economic growth that dampens job creation and wage increases.”
Retailers and shopping centres had to rethink strategies and sales campaigns and offer more to the ever-changing consumer, including extended shopping hours, entertainment and keeping children happy while parents shop.
Shopping centres introduced innovative childrens’ entertainment programmes. Mall of Africa “brought the beach” to Waterfall. The mega mall entertained families with authentic beach sand, water slides and pools.
Michael Clampett, head of asset management for Mall of Africa, said over the December period, the centre experienced a 9% increase in visitors compared to the previous year.
“From December 9 to 23, the park was transformed into a summer playground with activities for children of all ages. More than 17000 families visited the beach,” he said.
Gateway Theatre of Shopping in KwaZulu-Natal “brought snow” to Umhlanga with ice slides and snow ramps. Michelle Shelley, marketing manager for Gateway; said “Snow World” was a success.
“It was suitable for all ages and was open from December 1 to January 14 from 10am to 6pm daily. The activation was set up in the ex-Stuttafords premises and attracted more than 55000 shoppers,” she said.
Noel Otto, chief executive of Power Fashion Factory, said 2017 taught the group about lower LSM consumers and their significance.
“Results demonstrated that Black Friday has been adopted by lower LSM consumers who are known to budget methodically and who will cherry-pick exceptional value offers.
“We learnt that we have to plan our stock for this calendar event and take December trade into account as it undoubtedly erodes year-end disposable income. Margins need to be reactive and relative because price check tools expose perceived value against exceptional value. Our most popular item sales suggested that as a category and across the board, children’s clothing is where the action was. Boy’s T-shirts proved to be an outstanding sub-category.”
Otto said another trend he noticed during 2017 was customers looking for value and to get more out of their money.
“Customers are hunting for true value in fashion and goods on promotion to push their hard-earned money as far as it can go. This was observed from Black Friday, and it seemed to be the continued customer expectation through the high season.”
In a trading update for its year to December, Massmart reported a slight uptake in sales. For its 53-week period to end-December, total sales grew by 2.7% year-on-year. For 2017 sales rose by 1%. Comparable store sales dipped by 0.8%. The group operates in 13 sub-Saharan countries in its four operating divisions. South African stores grew sales by 1.8% with comparable store sales down by 0.2%.