News Research

Shopping centres remain exposed to weak sales performance of SA’s food retail industry

Apart from the ‘booming’ take-aways industry, the sales performance of the food retail industry in June 2022 was still very weak, says FNB.

StatsSA’s recent ‘Restaurant, Take-Aways, and Catering Income’ data report showed an acceleration in year-on-year growth in revenue following prior slow months. Total food and beverage income for the sector grew by 28.6% year-on-year in June 2022, an acceleration on May’s growth rate of 13.2%.

However, total restaurant, take-away and catering retail income for June 2022 was still -9% below the value of sales in June 2019 – a deterioration on May 2022 which was a -8.1% down on May 2019. In inflation-adjusted ‘real’ terms, this is still a significant -18.5% below June 2019’s level.

FNB splits the industry into three sub-sectors, ‘Restaurants and Coffee Shops’, ‘Take-Aways and Fast Food’ and ‘Catering’, When reviewing the three-month average growth rate, the catering sub-sector appears to be growing the fastest of the three. For the three months to June 2022, its sales grew year-on-year by 33.8%, followed by ‘Take-Aways and Fast Food’ sales growth of 19.4%. However, the ‘Restaurant and Coffee Shop’ sub-sector recorded the slowest growth of 16.1%.

When comparing recent data with June 2019, the ‘Take-Aways and Fast Food’ sub-sector’s income outperforms the other two categories, up by 35.6% in real terms.

‘Restaurants and Coffee Shops’ by comparison are -33.7% down in real terms from June 2019, while caterers are -35.6% down over the same period.

The weak performance of sit-down restaurants and coffee shops, compared to pre-Covid-19 performance, places retail centres, with a focus on this, at a disadvantage. A focus on ‘Take-Aways and Fast Food’ appears to have become significantly more advantageous for retail centres predominantly operating in this category.