Consumers hit malls less frequently, but spend more per visit
By Carin Smith - Oct 9th 2017, 08:56
Consumers are visiting malls less frequently, but spend more per visit.
This is one of the retail trends identified in the latest Retail Trends Report by the SA Property Owners Association (Sapoa) for the second quarter of 2017, released on Wednesday.
In what the report calls n-year growth rate in terms of trading density. Their declining trading density has been closely correlated to a weakening occupancy rate."
“While the historical trend suggests that super regional vacancies may be close to peaking, it will be of interest to see if improvements in occupancy come at the expense of rental growth. This is given that the super-regional segment cost of occupancy ratio has already increased significantly over the past 12 months,” states the report.
The two largest super regional merchandise categories - apparel and department stores - have seen trading densities decline significantly since the fourth quarter of 2015. The super-regional vacancy rate is now at its highest level since the report started in 2003 and 2.5 times its long-term average of 1.6%.
Community centres (between 12 000m² and 25 000m²) remained the top performing segment in terms of year-on-year trading density growth. According to the report, this suggests that consumers might prefer the convenience offered by the smaller retail formats for an increasing number of mall visits.
The community centres segment has, however, seen trading density growth sliding since the first quarter of 2016.
Neighbourhood centres (5 000m² to 12 000m²) was the second best performing segment after community centres.
The second quarter saw increases in the vacancy rate of all retail segments, except that of small regional centres (25 000m² to 50 000m²), which improved.
Over the last three years, the department store category lost market share across all retail segments. Other categories - especially apparel and health and beauty - gained market share across all retail formats, according to the Sapoa report.
For the three years ended June 2017, food retailers increased its share of sales in community centres by 6.7%.
According to the report, this mirrors the market share losses reported in the three larger retail segments, suggesting that community centre food retailers have been gaining market share at the expense of food retailers in larger centres.
The biggest loser with regard to the food category seems to be regional centres, suggesting that consumers are doing less grocery and food shopping at mid-tier centres, and instead prefer smaller, convenience-type centres.
The report does point out that overall, the performance of individual shopping centres continue to vary significantly in terms of indexed annualised trading density growth, as they are subject to different factors relating to, among others, competition.Fin24.com
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