South African retailers, especially national operators, are as robust and resilient as any group of retailers across the globe, says South African Council of Shopping Centres (SACSC) president Greg Azzopardi.
“South African retailers are flexible and have adapted to the ever-changing social, economic and political conditions here and abroad,” Azzopardi says, ahead of the SACSC’s fifteenth annual congress, which is set to take place at the Sandton Convention Centre, from September 14 to 16.
His positive sentiment about retail in South Africa, and, indeed, Africa, is shared by global retail icons including Wal-Mart, Zara and a number of Australian operators, all of which have identified South Africa as a retail location brimming with growth opportunities.
The key for new retail development is echoed in the seasoned property professional’s mantra: “location, location, location”, stresses Pan African strategy and branding agency, Integra Africa’s Vimbai Kadenhe, a speaker at the upcoming congress. “There’s a basket of factors to consider, like economic conditions, property market conditions, access to and cost of finance, construction and development capacity. But location is still the single most important one,” says Kadenhe.
Diversified real estate development, asset management and investment company Buna Group CE Caswell Rampheri believes there is great retail potential in Southern Africa, with new opportunities waiting to be unlocked in Mozambique, Angola and Zambia, while South Africa holds a host of possibilities in terms of redevelopments and accessing underserviced markets.
He notes that Buna Group has identified East Africa as bursting with retail potential, especially Kenya and new addition South Sudan. Ghana and Nigeria also present good prospects in West Africa.
“Both micro- and macroeconomic fundamentals are showing tremendous improvement. There is also better cohesion within countries and an improved investment climate,” says Rampheri of the potential for South African retailers to continue the drive up Africa.
He adds there is much competition among most African countries to lure investors and create jobs and cautions that retail in Africa is not a one-size-fits-all affair.
“A single strategy isn’t going to cut it across different countries, as it does within South Africa’s boundaries.”
He warns against a rigid approach in markets that are dynamic and require a higher degree of flexibility.
“Multistrategies based on the needs and opportunities in each market are essential. South African retailers are learning this, and learning it quickly.”
Economic, political, demographic and social capital analyst Johannes Landman notes that, in the past 15 years, the South Africa economy has only tripped twice and, in both cases, this was caused by global developments.
A repeat of this scenario is a real economic risk, over which South African retailers have no control. However, Landman, one of the guest speakers, explains that an instrument which is within their control is their social capital.
“Social capital enhances the ‘feel good factor’ of a company or brand. And any boost to the ‘feed good factor’ must be good for retail spending.”