SA malls brace for festive season spending
Tough macro-economic conditions have little effect on consumer spend – economist. Shopping malls across the country are starting to see an influx of shoppers as businesses and schools close for the year and holidaymakers wrap up their preparations for the festive season.
Despite a lacklustre performance by the retail sector in the third quarter of 2016, malls are not anticipating a downturn in trade, as easy access to credit and other factors continue to facilitate consumer spending.
According to macro-economist Professor Ronney Ncwadi, stable interest rates and an inflation rate that has been kept in check mean that household incomes have increased in real terms.
“Faced with easy access to credit both from formal and informal money lenders, people will be able to spend during this season. In addition, some employees receive bonuses during this period, while
the stokvels and various social savings clubs also draw their savings during this time,” Ncwadi said.
The JSE-listed Rebosis Property Fund, a major player in the retail industry, managing six key retail developments across the Eastern Cape and Gauteng, is predicting brisk trade across all its malls.
At Forest Hill City in Centurion, general manager Annah Moremela said festive season trade was set to be an improvement compared to the same period last year.
“Although the indicators show a decline in economic growth, we have seen that people have made provision for their families to enjoy the festive season with a few extra spoils,” said Moremela.
In the coastal city of East London, Hemingways Mall general manager Reinette van Tonder said the annual influx of holidaymakers had already begun boosting foot traffic to the centre.
“Hemingways Mall traditionally caters for two markets – the permanent residents of East London and the holidaymakers in season,” said Van Tonder. “In this tough economic climate, many people who would have previously travelled overseas are instead opting to stay local and travel to the coast for their holidays, so we are expecting a busy festive season.”
At sister mall Mdantsane City, general manager Dean Deary said the early payment of social grants and pensions had stimulated trading at the township mall.
Deary said business had been brisk, especially for tenants selling essentials such as groceries, and some luxury items such as branded clothing.
BT Ngebs City general manager Lolo Sabiso said consumers in the rural centre of Mthatha had been a little more cautious in their spending. Despite this, trade was anticipated to be boosted by the influx of family members from around South Africa returning home for the holidays, he said.
“The buying power is there but one predicts the shopper will be a little cautious, given that a lot of spending was done during Black Friday and also because the economy is not favourable.”
Sabisa said the large regional mall, which is owned by Rebosis parent company, Billion Group, represented an evolution for the rural community in that migrant workers who spent most of the year in SA’s larger cities helped to bolster the mall’s performance when they returned home for the holidays.
“These big spenders from the big cities are delighted to find the kind of shopping mall they are used to right here in their home town, thanks to the big national brands housed at BT Ngebs,” Sabisa said.
In Nelson Mandela Bay, the super-regional Baywest Mall is also catering to the upswing in foot traffic by offering extended trading hours until Christmas Eve.