Even with the sixth highest number of shopping centres of any country in the world, there are still huge opportunities for more retail centre development in South Africa.
Delving into the state of South African retail, Tagg said that while there was retail saturation, and even cannibalisation, in some markets, the emerging black middle class in South Africa and growing urbanisation were driving retail demand in areas like Gauteng, Limpopo and Mpumalanga.This is the word from Gavin Tagg, Managing Director of Retail Network Services, a leading full-service retail leasing and development company. He was addressing more than 200 retail and shopping centre professionals as a guest speaker at the South African Council of Shopping Centres’ (SACSC) Gauteng Breakfast at the end of last year.
Delving into the state of South African retail, Tagg said that while there was retail saturation, and even cannibalisation, in some markets, the emerging black middle class in South Africa and growing urbanisation were driving retail demand in areas like Gauteng, Limpopo and Mpumalanga. However, he stressed the need for responsible shopping centre development and retail expansion.
“Establishing the primary trading market of a shopping centre development with market research is key to its success. This market research dictates the size of the shopping centre and the level of sales it can achieve. It reveals the spending habits of its market, so a centre can offer stores in corresponding merchandise categories,” he explained.
Tagg believes that more retail cannibalisation is inevitable in the highly competitive capitalist market. So, malls and retailers need to find ways to be better in the face of greater competition and to serve the consumer better.
“With more and more international retail brands entering the country, SA’s retailers need to put their best foot forward to avoid losing market share and to remain attractive in the retail mix of shopping malls,” he said.
Tagg revealed that, on average, only one in 10 applicants for “mom and pop” type stores at shopping centres were accepted. This is based on criteria including having a sound and realistic business plan, wanting the right sized shop and a good design and shopfitting.
“Retail isn’t easy. It’s hard work. Plus, to be considered for a store in a shopping centre you also have to add value to the centre and be unique or different from other retailers. Each store plays an important role in the shopping centre ecosystem, with mall owners and consumers alike demanding nothing less than the best,” said Tagg.
And this goes for long-standing retailers as well as new retail concepts. With this in mind, Tagg believes the role of mom-and-pop stores as attractions and differentiators in a shopping centre shouldn’t be underestimated. In fact, he told SACSC members that shopping centres need to incentivise and support mom-and-pop retailers, even going as far as encouraging subsidies for these unique concepts.
Focusing on today’s retail landscape, Tagg listed eight dominant trends.
