Retailers in most types of shopping centres reported a year-on-year (y-o-y) trading density (TD) sales growth in December 2016, reveals Broll Property Group* in its Retail Snapshot Q4: 2016 report. But, the stores in bigger shopping centres performed best. The report also reveals that different product categories often perform better in different sized centres, which attract different types of customers.

Retail sales for the December period grew by 8.3% to R108.662-bn (up from R100.307-bn in December 2015), according to Statistics SA. The impact of the Rand on prices distorted figures, however: in constant prices there was actually a 0.9% y-o-y growth.

There was also a 3% decline in sales from November 2016 to December of the same year, “possibly as a result of Black Friday which took place in November,” speculates the Retail Snapshot Q4: 2016.

Retailers responding to our Sports Trader survey earlier this year on their holiday period sales gave similar feedback on the impact of Black Friday.

Unfortunately, the retail sales figures from Statistics SA for January 2017 (1.2% down seasonally adjusted and 2.3% down in real terms) and February (up 0.8% seasonally adjusted and down 1.7% in real terms) were more bad news. Retail sales for clothing and footwear were 5.3% down in January and 7.6% in February.

Stores in regional and small regional centres performed better than those in smaller centres during this period (7.9% and 6.1% retail sales growth respectively), reveals the Retail Snapshot Q4: 2016 report. This “can be expected as these larger centres offer an overall shopping experience with access to most retail categories under one roof, a conducive environment for consumers looking for a variety of festive gifts and a shoppertainment experience,” says Elaine Wilson, divisional director for research at Broll Property Group. The group classifies regional centres as 50 000-99 999m2 in size, and small regional as 25 000-49 999m2.

Elaine-Wilson-Broll
Elaine Wilson, divisional director for research at Broll Property Group.

Local convenience as well as neighbourhood centres saw lower retail sales growth: 4.2% and 3% respectively. The report classifies local convenience centres as below 5 000m2 in size, while neighbourhood centres are between 5 000 and 11 999m2.

The exception is community centres (12 000-24 999m2 in size), which saw a sales decline of -0.8%.

The category with the highest y-o-y growth was Textiles, Clothing, Footwear and Leather Goods (17.7%). Food and Drink sales showed the second highest growth (15.6%), compared to the same period the previous year. The Household Furniture, Appliances and Equipment category was the lowest performer, reporting a negative growth of 2.1%.

All centre types showed a y-o-y TD growth for textile and clothing sales. The category performed the best in regional and small regional centres where it showed a 6.7% and 8.8% y-o-y growth respectively. This is attributable to the majority of fashion retailers being present within these larger centres, explains the report.

Sales in the Other category, which includes sports goods, increased by 2.4%. It performed the best within regional centres, where it showed a y-o-y growth of 11.8%. The other category also covers reading matter and stationery, jewellery, watches and clocks, and entertainment requisites.

Almost half of retail sales (43%) during December were in General Dealers, reveals Statistics SA. The highest TD for these stores was in local convenience centres, where they experienced a y-o-y growth of 22.3%. Statistics SA defines General Dealers as those stores that are non-specialised and sell mainly food, beverages and tobacco.

“The reason for the high TD growth within local convenience centres may be as a result of the convenience, services and ease of access aspects that these centre types offer, which have become important to time-strapped consumers,” states Broll’s report.

*The Broll Property Group is a property managing company that leases and sells property, including retail space in a variety of shopping centres. The full report can be downloaded from http://www.broll.com/publications.