Johannesburg, South Africa – January 2020: Over the past few years, there has been a noticeable trend of shoppers moving toward destination malls as online shopping lures customers away from the traditional mall environment. South African trends have observed the same pattern emerging especially with recent mall developments like the Mall of Africa and large refurbishments at Fourways Mall both located in the Northern Parts of Johannesburg, that are trying to establish themselves as market leaders by offering flagship stores and unique amenities.
In South Africa however, another trend has emerged as evidenced through work done by Navigare Securities – a local stockbroking firm that tracks the performance of mall-owning companies. Aggregated and anonymised data from Tracker, analysed by data and analytics firm, Lightstone, showed that small community and neighbourhood centres outperformed the larger super-regional centres in 2019. For that year, visits to super-regional centres by Tracker vehicles were down 1.8% compared to the previous year, while visits to community centres and neighbourhood centres grew 3.0% and 0.7% over the same period. Navigare believe that this movement in 2019 was primarily due to the constrained consumer not visiting large malls to spend on luxury items, but continued to visit closer, smaller centres for necessities.
This shift from large to smaller malls has now been amplified by the COVID pandemic, with the large super-regional centres experiencing the most significant decline. One of the key attributes to this could be that these so-called strip malls provide a quick-in-quick-out solution together with a selection of essential shops. For May 2020, visits to super-regional malls were down a hefty 46% when compared to the previous May, while visits to community centres were down 36% and neighbourhood centres down 32%. “This is a definite improvement from the total visits down 59.3% in April compared to April the previous year, but again, we can see the super-regional malls taking the brunt of the decline,” says Linda Reid, head of Data for Lightstone.
To get an indication of which retailer would be most affected by this trend, Lightstone overlaid the retail locations of grocery and pharmacy chains with their Tracker-tracked shopping centre database (over 1300 sites). Higher-end grocery retailers (which tend to have more sites in larger malls) were mostly impacted as visitors stayed away from the large centres, while grocery retailers servicing the lower-income customer as well as retailers with more standalone stores were less impacted. In the pharmacy sector, Dis-Chem and Clicks seem to be impacted similarly according to insights derived from the Tracker data, although it must be noted that there is a strong likelihood of less frequent visits and increased basket sizes in the lockdown period.
A list of the individual outlets that have gained the most in terms of having the highest proportion of their customer base – either new, or old customers, now frequenting them more than before is outlined below. These stores are either located in small centres or are standalone stores and generally serve the lower income customer and reaped the benefits from people who live in the area that may not have been able to shop at their usual places closer to work due to being locked down at home; or they were not able to travel to their usual, possibly larger malls. Another reason could also be that the lower income consumer was not able to stock up for longer periods due to constrained budgets therefore still frequented local stores for necessities.
“Given the shift in patterns to smaller centres, it becomes more important to understand when the best time of day is to make your regular shopping trips which is why we have created the ShopSafe app in partnership with Tracker,” says Reid. The Shopsafe app utilises the users location or favourite frequented shopping destination and displays the busiest times throughout a seven day week. “People are now able to plan their shopping trips by understanding how busy each shopping location is, any day of the week,” she concludes.