WORDS: Phil Rhuimte
Researcher Barbara Heer concedes that despite deep inequalities, shopping malls have become one of the most important leisure activities and a dominant mode of contemporary public life. But amid the Covid-19 pandemic, many malls and shopping centres were left empty, particularly during the hard lockdown
This festive season is thus the first where the fear of Covid-19 is at its lowest, and feet are fully back in public spaces. There have been many indications that this upcoming period will prove lucrative for store owners and brands. For instance, Sandton City owner, retail-centred REIT Liberty Two Degrees (L2D), reports sustained recovery during 2022 despite the challenges of the energy crisis, escalating municipal rates and Covid-19-related issues.
L2D prides itself on the quality and iconic nature of its properties in the Western Cape, Gauteng, KwaZulu-Natal and the Free State. The company’s portfolio includes Sandton City, Nelson Mandela Square, Eastgate Shopping Centre, Promenade Mall, Midlands Mall, Melrose Arch, and Botshabelo Mall in Bloemfontein, among other properties.
Jonathan Sinden, Chief Operations Officer at Liberty Two Degrees, is confident that the next few weeks will prove fruitful for brands in malls and refreshing for shoppers. If results are anything to go by, there is no arguing with his sentiments.
The latest South African Property Owners Association’s Retail Trends Report shows that super-regional shopping centres, such as the V&A Waterfront in the Western Cape, The Gateway Theatre of Shopping in KwaZulu-Natal, and Sandton City in Gauteng, are now trading 6.4% above their pre-pandemic level. On the other hand, L2D achieved a 29.6% growth in foot count for the nine months in 2022 compared to 2021 and 9.8% ahead of 2019. The top five retail categories with the most improved trading density performance in 2022 compared to 2019 include luxury brands (149.2%), technology (44.5%), luggage and leatherwear (35.4%), grocer/supermarket (18.8%) and health/beauty/grooming/wellness (9.0%).
Sinden echoes these results saying the luxury goods market is robust, with more international luxury brands looking to bring their products to SA. Moreover, local shoppers who were previously accustomed to taking overseas trips to shop for luxury have realised that they can shop locally for internationally available items at the same price points as they would abroad.
“In 2015, Sandton City launched the Diamond Walk, anchored by Louis Vuitton, Gucci and Dolce and Gabbana. Thereafter, we started to aggregate our luxury brands and have seen phenomenal turnover growth. Sandton has certainly become the home of luxury in this country,” Sinden says.
The luxury market might be thriving, but with high-interest rates and an increased cost of living, are the lower LSM groups who shop predominantly at smaller malls able to continue shopping? Sinden says smaller malls are generally anchored by one-two food chain stores, alongside banks and pharmacies. Therefore, they were not as severely affected by Covid-19 as people continued to shop for food and other necessities such as medications during lockdowns. He points to L2D’s single-level Botshabelo Mall, saying it continues to thrive. “The offering at this mall is attractive for that particular market sector. It continues to be a hub in that area,” says Sinden.
According to the recently released 2022 South African Digital Customer Experience Report, which polled 2,000 consumers, about 87% of South Africans have used online shopping, including those from low-income households. The report indicates that e-commerce is integral to South Africans’ lives – transcending income, age and geographical location. Moreover, the price of a product is now less important than the consumers’ perception of the brand’s reliability. Though there have been previous fears that e-commerce may stifle the growth of malls, Woolworth’s Liz Hillock is quoted in the report saying: “Although our e-commerce offer has one of the highest online contribution rates in SA, it is a fraction of what our digital platforms are aiding in terms of in-store purchases. More than 60% of our online browsers claim to buy in-store, and this reinforces our focus to lead in omnichannel retail.”
In addition, online shopping is driving feet to physical stores. According to the report, online product research and discovery influences R293.8bn in physical sales, accounting for 25% of SA’s retail trade.
Sinden agrees, saying e-commerce and physical retail coexist harmoniously. “Some shoppers do their research online but go into the mall to shop for their chosen products as some products are better purchased in person. Moreover, consumers are becoming more advanced and knowledgeable about the products they buy,” says Sinden.
His sentiments are echoed by Michael Zahariev, co-founder of the luxury reseller, Luxity. “While e-commerce is here to stay, the resurgence of mall culture post-pandemic is clear. This has been evidenced by a number of SA’s commercial property groups not only seeing footfall numbers exceeding pre-Covid levels but spend per head too,” he says.
Says Zahariev: “South African consumers clearly enjoy the best of both the online and offline shopping worlds, so, for retailers to retain and grow their customer base, they need to not only ensure a seamless experience across all touchpoints but also meet customers where they are, not where retailers think they should be.”
Sinden says over the festive season, people can relax at malls with several experiences planned, such as Eastgate’s Festive Colour Land and Sandton’s The Festive City. Moreover, he shares that L2D’s malls are fully equipped with backup power and will not be affected by power outages, therefore shoppers can continue to enjoy a festive time at these establishments.
