The Month in Review
In this “Month in Review” blog, we will be highlighting some of the impacts Covid has had on retail and e-Commerce over the last year.
Bizcommunity South Africa has published an article, based on figures produced by FNB, tracking cardholder retail spending over the last year. Amongst their findings we found the following 3 points to be of great interest:
- The smaller provinces with more agriculture-based communities have fared a lot better than the main provinces in retail spend, with the NW province seeing an annualised positive growth of 5.8% followed by Northern Cape at 5.5%, whereas the larger provinces saw declines. Western Cape decline of -2.2% and KZN -1.3%. Gauteng growth was flat. This is obviously because Agriculture was exempt from lockdown and had a positive year which filtered through to the respective communities.
- The top performing category in retail spending was hardware and furnishing. This is a direct result of people spending more time at home and identifying renovation requirements as well as the conversion of home to office trends.
- Supermalls experienced an overall 10.4% decline in spend and regional centres 5.9%. Convenience Centres experienced an increase of 7% and regional centres 6.1% On the whole retail spending is showing signs of recovery.
The full report can be read here: https://www.bizcommunity.com/Article/196/567/214162.html
E-commerce has grown dramatically during Covid and has sustained this growth. Whilst the YOY March 2020 over March 2019 reflected a normal growth of 30% (with or without the pandemic, e-commerce growth in South Africa was a given). However, by May 2020, the annualised growth was a phenomenal 123% over the previous year. Even with the country shifting to level 1 in lockdown last year and this year, growth has remained at a steady 66% and the shift to e-commerce in a big way appears to be here to stay.
In our own business, we are still seeing that the office market is struggling with retail remaining down in most areas. We are also picking several properties in Business rescue or heading to liquidation. The trend for conversion of office to retail continues unabated – and this month saw a successful sale in Bedfordview’s prime node. Whether a property is suitable or not for residential will depend largely on its location in terms of the area’s spatial development plan as well as its current zoning and building design. Certain categories of Business zoning require rezoning and can render a property less attractive to a developer.