Shopping Centre Trends in South Africa
Globally, shopping centres (especially shopping malls) are having to adapt to the growth in online shopping. This has been the case for several years now.
Shopping malls have to offer more entertainment options in order to attract shoppers
The International Council of Shopping Centres (ICSC) reports that 20% of shopping malls in the US generate over 72% of all mall sales. That means there’s a lot of centres competing over a small segment of the market.
South Africa has more retail space than the rest of Africa put together, and lots of mall space. Relative to our disposable income, we have a high number of shopping centres: https://businesstech.co.za/news/business/261469/heres-how-many-shopping-centres-there-are-in-south-africa/
This will be a limiting factor on new developments – there won’t be enough shoppers for all the retail options
The real estate fundamentals in SA are not good right now, but Fourways node is underserviced in terms of retail space and we also anticipate a Gautrain service at some point in the future which could make a success of the Fourways mall, which will be the largest in Africa.
The bigger question is – are we coming to the end of the Megamall era? A struggling middle class and a shift to online shopping will change the way the way shopping centres are designed in the future. https://citizen.co.za/business/2143209/sas-megamall-era-to-come-to-an-end-with-fourways-mall/
Retail expansions are still happening outside of Joburg, Cape Town and Durban – this is a news story about Boardwalk in Port Elizabeth: http://www.sacommercialpropnews.co.za/south-africa-provincial-news/eastern-cape/9068-pe’s-boardwalk-precinct-gets-r600m-retail-project.html
Certain nodes seem to be doing well eg Cornubia in Durban, where a new Makro has just opened:
New malls are still opening in under-serviced areas, such as Vryburg, which until now has relied on a traditional high street model – so the shift to shopping centres is still very much a trend https://www.crown.co.za/property/10217-twin-city-develops-new-r290m-mall-in-vryburg
Convenience is a major driver of shopping habits in South Africa. The growth of c-stores and their offering is a definite trend in South Africa. This article on the 10th anniversary of Fresh Stop has some useful pointers: http://www.fastmoving.co.za/news/retailer-news-16/sa-s-fastest-growing-convenience-retail-brand-freshstop-turns-10-13332
They mention how they worked with the DTI to support black frnachisees.
Shopping Centres are also using more advanced data analytics to better understand their shoppers: http://www.sacommercialpropnews.co.za/global-property-news/9003-how-advanced-data-analytics-is-boosting-shopping-centre-performance.html
South Africa shopping centres may start to move away from their parking garages as more shoppers rely on Uber and similar services: https://businesstech.co.za/news/technology/239483/south-african-shopping-centres-will-slowly-start-to-ditch-their-massive-parking-garages/
Security is always a trend in South Africa and shoppers are vulnerable. A recent murder at Pineslopes has put the spotlight on shopping centre security once more: https://www.iol.co.za/sundayindependent/news/mall-to-review-security-measures-after-sandton-mans-death-28728490 Woodmead also recently had a shoot out at the Dion Wired – shoppers were greeted with the site of police tape on a Sunday at the end of the month, so it was a disaster both for the retailer and the centre. The Rolex Gang appears to still be targeting wealthy shoppers near Hyde Park and Sandton City.
More and more shopping centres and malls are offering small craft markets on weekends – a chance to offer a slightly different retail experience in addition to the normal weekly grocery shop. Globally, shoppers are much more interested in experiences/ authenticity so this is a useful way to attract shoppers who might otherwise be lured to a Fourways Craft Market or Riversands, for example. It’s worth noting that the same shopper can be both interested in saving on the monthly grocery shop by buying in bulk, but also want to taste new kinds of cheese or discover handmade jewellery.
The biggest recent development on the retail calendar is Black Friday, which has shifted the centre of gravity from December to late November (and sometimes the whole of November). To compete for share of wallet, retailers and shopping centres will need to have a Black Friday strategy. Black Friday is a significant driver of interest in online shopping – retailers like Makro used it to drive interest in their click and collect offering last year and we can expect more and more shopper Rands to shift online.