There has been a noticeable international trend of shoppers moving towards destination malls as online shopping lures consumers away from the traditional mall environment. South African trends have observed the same pattern emerging, especially with recent mall developments including the Mall of Africa and the large refurbishments of Fourways Mall, trying to establish themselves as market leaders by offering flagship stores and unique amenities.
Locally, another trend has emerged through work done by Navigare Securities, a local stockbroking firm that tracks the performance of mall-owning companies. Aggregated and anonymised data from Tracker, analysed by data and analytics firm, Lightstone, shows that small community and neighbourhood centres outperformed the larger super-regional centres in 2019. Visits to super-regional centres by Tracker vehicles were down 1.7% compared to 2018 while visits to community centres and neighbourhood centres grew 3.0% and 0.7% over the same period. Navigare believes that the movement in 2019 was primarily due to economically constrained consumers not visiting large malls to spend on luxury items but, to continue to visit closer, smaller centres for necessities.
The shift from the large to smaller malls has been amplified by Covid-19 with the large super-regional centres experiencing the most significant decline. For May 2020, visits to super-regional malls were down by a hefty 46% when compared to May in 2019. Visits to community centres were down 36% and neighbourhood centres were down by 32%.
“This is a definite improvement from the total visits down 59.3% in April compared to April the previous year, but again, we can see the super-regional malls taking the brunt of the decline,” says Ruanne Foster, Head of Research for Navigare Securities.
Lightstone overlaid the retail locations of grocery and pharmacy chains to better understand which retailer would be most affected by this trend. Using their Tracker-tracked shopping centre database (over 1 300 sites), higher-end grocery retailers (which tend to have more site in larger malls) were mostly impacted as visitors stayed away from the larger centres while grocery retailers servicing the lower-income customer and, retailers with more standalone stores, were less impacted.
In the pharmacy sector, Dis-Chem and Clicks seem to be impacted similarly according to insights derived from the Tracker data although there is a strong likelihood of less frequent visits alongside increased basket sizes during the lockdown period.
A list of the individual outlets that gain the most in terms of having the highest proportion of their customer base being new or old customers, are now frequenting them more than before. These stores are either in small centres or standalone stores and generally serve the lower income consumer. These stores have benefited from people who live in the area and who potentially, are not able to shop at their usual places closer to work due to the national lockdown. Another reason could be that the lower income consumer cannot stock up for longer periods due to their constrained budgets and thus will still frequent local stores for necessities.
“Given the shift in patterns to smaller centres, it becomes more important to understand when the best time of day is to make your regular shopping trips which is why we have created the ShopSafe app in partnership with Tracker,” says Linda Reid, Head of Data at Lightstone.
The Shopsafe app allows the user to view the relative attendance at a shopping centre on any specific day of week and identifies how busy the centre throughout the day. “People are now able to plan their shopping trips by understanding how busy each shopping location is, any hour of the day,” she concludes.