Advice and Opinion

Retail can expect a cautious festive period

As retailers across the country optimistically prepare for what they hope to will be a very prosperous festive season, CEO for Excellerate Property Services Group Marna van der Walt remains somewhat cautious based on her insight of retail forces for the holiday period.

Excellerate Property Services is a leading integrated property related solutions and service provider in Africa. It includes established property manager JHI Properties which recently announced a ground-breaking partnership with Liberty Holdings’ property management business, to undertake the property management of all Liberty’s shopping centres, including Sandton City and Nelson Mandela Square, Eastgate, Liberty Midlands Mall and Liberty Promenade. Van der Walt is also President of the South African Council of Shopping Centres (SACSC) and has over 20 years’ experience in the property industry.

Keeping in mind the ever increasing cost of living, poor job creation, lost income due to continuous strike action and soaring food and fuel prices, Van der Walt believes that while certain sectors will continue to perform well, the pressures on other sectors will increase.

“Conditions for the consumer remain tough and some retailers will continue to feel the pressure as their customers choose necessity over extravagance,” says Van der Walt. Yet, it isn’t all doom and gloom, with some retail categories well placed to outperform.

For this reason, grocery stores and supermarkets will excel over the festive season. Liquor stores, food speciality and food services however, will do well leading up to Christmas, but may see sales peter out towards January.

Shoppers will also be less likely to spend on furnishing, opting instead for outdoor goods for their homes as more and more South Africans spend their holidays at home. Garages will also see a peak in car services and sales will be on the up at DIY and hardware stores during December. “With tough economic conditions, consumers are focused on repairing and maintenance rather than replacing expensive items.”

Van der Walt notes that community shopping centres could also feel a bit of a pinch as their regular customers visit large super-regional centres instead for festive season promotions and one-stop shopping trips to save on petrol.

“Sales in children’s’ wear will peak significantly over Christmas, doing considerably better than unisex, men’s and women’s clothing,” she says. National department and mini-department stores, on the other hand, will do well this festive season due to their more affordable payment options in contrast to boutiques and independent clothing stores.

Van der Walt also predicts a successful season for the Health and Beauty sector, as well as stationery stores, as these purchases double-up as ‘sensible’ Christmas gifts. With Back-to-School fever hitting in early January, stationery stores will continue to do solid trade right up to February, while health and beauty stores will see a decline post-Christmas.

“With such a strong focus on the basics, I think spend at family centres and entertainment will either decline or remain as low as figures from last year’s festive period, along with all other non-essential purchases.”

Excellerate Property Services enables the businesses of leading shopping malls and retailers in Africa with tailored solutions. It includes the integrated property services of JHI, JHI Residential, Excellerate Facilities Management, Excellerate Valuation and Advisory Services, Interpark, Sterikleen, Green Machine Horticultural Services, First Property Technical Services, Chattels Infrastructure Solutions, Fresh Canteen, Kgodisa Training Academy, Eradico Pest Control and Enforce Security.

“The festive season is the busiest time of year for Excellerate Group’s shopping centre owner clients, so we start planning preparing early for this busy time to ensure shopping malls, and their retailers, to maximise the benefits it brings,” notes van der Walt.