Friday, December 14

Understanding township retail

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Market has buying power of R11 billion and there’s a growing demand for high-end stores

Not township resident is poor and nor do they all speak slang. Yet these are common misconceptions among retail brands and the reason many are not reaping the rewards on offer by the country’s booming township retail and shopping centre market, said Lemok Group founder and chief executive Lebogang Mokubela.

The township retail and shopping centre market is growing rapidly and despite a challenging economy and disruptions, townships have become hubs for big development in retail and brands.

The township retail market is “a force of its own” and should not be overlooked or underestimated, said Mokubela. He formed the Lemok Group at the age of 25 and has grown it from a small township-based consulting company to an award-winning digital marketing firm.

Speaking at the eighth annual SA Council of Shopping Centres’ (SACSC) Research Conference, Mokubela said the township market had a buying power of R11billion, with the number of shoppers turning out at the Maponya Mall at any given weekend testament to this.

“As an example, the R650 million Maponya Mall in Soweto, occupying 6 500m², is one of the largest retail hubs in South Africa. “A balance of sought-after tenant mix and entertainment drives profitability within the township market. “Previously, you wouldn’t find highend stores like Woolworths Food in the township, however we are seeing a bigger demand for such stores.”

The township market is also diverse with shoppers ranging from those who earn R1 000 a month to those who spend R1 000 on a bottle of champagne. Mokubela said social cohesion was important among township communities and big business houses, and retail decision makers needed to be aware of this. “Most people would be surprised how diverse the township market is. What drives resonance in the market is simply social cohesion – people want to see and be seen. 

High-end stores like Woolworths Food are in growing demand in township malls. Picture: Arneg South Africa

“Shopping centres that can create spaces and initiatives where the market can, and want to be seen at, will win.” But developers and shopping centre marketing managers need to consider the demographic profile of the specific township before developing a mall or shopping centre. They also need to carefully consider the tenant mix to ensure shops will draw township shoppers.

Centres on the increase 

The Retail Centres and Township Development case study commissioned by Urban LandMark and conducted by Demacon Market Studies in partnership with the Training for Township Renewal Initiative and National Treasury, highlighted the growth of the township market in the past decade.

The development of shopping centres in townships and rural areas have increased significantly. Nationally 160 centres had been developed in second economy areas by 2009. Of the 116 developed since 1962, a total of 66 were developed between 1962 and 1999 and 50 in the 10 years between 2000 and 2009. The average size, measured in terms of retail floor space, increased from 6 500m² gross lettable area before 1994, to almost 20 000m² post 1994.

Free loos in malls, please

Pay toilets in township malls came under the spotlight at the recent South African Property Owners Association (Sapoa) when a delegate asked why shoppers were expected to pay to use the loos in township malls but not in the suburbs.

The delegate asked DA leader Mmusi Maimane, who had addressed the conference, for his views on this fact.

Maimane said he disagreed with the practice.

“I think shopping centres ask too much. You pay for parking, you pay for toilets – it is a bit bizarre. I think that factored into the whole process of the (shopping centre) agreement, there must be a reasonable provision of sanitation.”

Maimane said he had experienced having to pay R2 or R5 to use a centre’s toilet. Stopping mid-sentence, he said: “Sorry, can I urge the (Sapoa president): Please can we review that policy and make sure our people (can go to the toilet for free). Just hire people for centres so they can provide decent toilets that are clean. Asseblief, please.”

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