Advertise with fastmoving.co.za
 
 

SA retailers seek post-election boost as belts tighten.
SA retailers seek post-election boost as belts tighten.

SA retailers seek post-election boost as belts tighten

ECONOMIC NEWS

Business Tech - May 10th, 11:02

Londani Nemaguvhuni’s Sunday trip to the Mall of Africa north of Johannesburg is a finely balanced operation. The 29-year-old has to provide for his young son but also needs to cut costs. 

Like most South Africans, the construction foreman is feeling the effects of rising taxes, fuel costs and other bills alongside sluggish economic growth that’s put a dent in consumer confidence. A flurry of electricity blackouts could lead to a fifth year of less than 1.5 percent growth, while the joblessness rate stands at 27 percent.

“In any economy that is suppressed, people have to make choices,” said Richard Brasher, chief executive offer of nationwide supermarket chain Pick n Pay Stores Ltd. “For the less affluent in society, their choices are a bit starker in terms of clothing, footwear, rent, and electricity,” he said in an interview last week.

The impact on personal budgets and spending plans is brought into focus as South Africans gear up for a national election on May 8. The ruling African National Congress is on course to retain a majority held since the first all-race vote 25 years ago, according to opinion polls, a result that would extend the 15-month presidency of Cyril Ramaphosa.

Consumer confidence soared after he replaced Jacob Zuma, whose nine-year tenure was marred by a string of corruption scandals and the near collapse of state-owned companies such as utility Eskom Holdings SOC Ltd. But the surge of optimism popularly known as Ramaphoria has died down, and confidence is the lowest since late-2017, according to a closely followed index.

Pick n Pay has offered steeper discounts on several food items as the Cape Town-based company grapples with selling price deflation. Shoprite Holdings Ltd, Africa’s biggest grocer with the bulk of its 2,738 stores in South Africa, in February forecast a drop in full-year earnings. Reporting on December holiday sales, Shoprite said back-to-school essentials outperformed discretionary purchases such as toys for the first time.

The pinch has even been felt by Woolworths Holdings Ltd, a seller of organic food and designer clothing that targets higher-income customers. Its South African fashion, beauty, and home sales slid 2.4 percent in its first-half through late December, while food held up. The FTSE/JSE Africa General Retailers Index has dropped 5.9 percent this year, compared with the benchmark all-share index’s 11% gain.

Even so, a clear majority for the ANC next week could boost shares in local companies including retailers and banks as it may enable Ramaphosa to enact bolder, investor-friendly policies, according to UBS Group AG.

“Anything that gives us stability of exchange rates, stability of government and consistency of message will result in people feeling better,” Brasher said.

For Nemaguvhuni, who works about two and a half hours outside of Johannesburg, it’s unclear how long it will be before he can juggle the budget to pay near-record fuel prices and afford more regular trips home.Business Tech 

Related News

Checkers brings world-class retail to Constantia with new flagship store
27/11/2019 - 13:01
Checkers has opened the doors to its state-of-the-art 2 330 m² flagship supermarket at the Constantia Emporium as the retailer continues to take innovation to new heights.

Woolworths carves out market share in SA
27/11/2019 - 10:11
In Australia, David Jones's sales declined 2.1%, with the company saying a store refurbishment contributed to the decline.

Push and pull strategies work together to keep consumers coming back for more
26/11/2019 - 10:20
The retail sector is under increasing pressure as consumers have shrinking disposable income in a strained economy. Maintaining share of wallet is critical. Relying solely on a push route to market strategy from manufacturers into retailers is not enough to get consumers buying products. A pull strategy needs to coexist with the push to drive brand consumption. Integrating these strategies requires intelligent and insightful decision-making. This, in turn, requires data generated through smart technology which provides line of sight across the value chain from manufacturer to distribution, retailer to the consumer.

SA expected to sow fewer maize hectares than in previous seasons
26/11/2019 - 10:06
South African farmers are expected to sow 2.8% fewer hectares of the food staple maize next season than forecast in October after the planting season was delayed by rains, a Reuters survey of analysts showed.

Exclusive leases must fall: Commission cracks whip on Shoprite, Pick n pay, Spar, Woolies
26/11/2019 - 09:57
The Competition Commission Inquiry into Grocery Retail, published on Monday, called for an end to the exclusive leases negotiated by national retail chains in all shopping malls across the country in a bid to open up access to markets for smaller players.