Advertise with

Retail industry ‘has growth potential’

RETAILER NEWS - Oct 5th 2016, 09:00

STRETCHED consumers with reduced disposable income are not unique to SA’s retail sector, says Raam Ratnam, S&P Global Rating’s senior director for corporate ratings for retail companies. But pressure on credit spend is a significant local risk. 

Ratnam said on Tuesday that despite the drawbacks in the sector, there were still plenty of opportunities for retail in SA.

"There has been an influx of foreign competitors coming to SA, especially in apparel, but there is scope for more penetration. A market such as the US is one we would consider to be extremely competitive, with certain segments perhaps even over-retailed," Ratnam said.

S&P publicly rates more than 50 retailers across Europe, Russia and Africa. Edcon is the only retailer publicly rated in SA.

Ratnam said ratings significantly increased the level of transparency and comparability. Some investors had mandates to invest only into assets with certain rating thresholds, such as investment grade.

"Ratings are also constantly surveilled to reflect developments in a company. The analysts who look at the companies are often in frequent contact with them," Ratnam said.

Global trends in the retail sector included the migration from physical stores to online and a renewed focus on managing space efficiently.

Competition levels were also rising, Ratnam said, as the line between premium and discount retailers blurred.

"Retail can be a bellwether sector," he added. "It can inform us on the bigger picture in a country. We can start by asking what’s happening in retail? It’s such a good barometer for the economy." he said. 

Read more about: | consumer | retail industry | retail

Related News

Ackermans launches ‘Moms4Moms’ educational platform to give mothers a helping hand
16/09/2019 - 14:03
According to a 2017 Statistic South Africa report, 61% of South African children are raised by only their mothers. This reveals that the majority of South African women have to navigate single-parenthood, as well as being the sole provider for their families.

Rhodes Food Group's turnover rises amid healthy international growth
16/09/2019 - 11:14
The international turnover of Rhodes Food Group, which makes Bull Brand corned meat and Bisto gravies, rose 13.4% in the 10 months to end-July, boosted by a weaker rand and exports of fruit snacks to the US.

The changing UX and CX landscape
13/09/2019 - 16:16
An exceptional customer experience (CX) builds a foundation of loyalty and trust. Similarly, a positive user experience (UX) encourages brand connections with people wanting to come back for more. And yet, local organisations must learn to embrace these more effectively to differentiate themselves from their competitors.

Footgear gets go-ahead to buy Edcon's footwear brands
13/09/2019 - 09:24
Footgear, the South African retailer of branded and non-branded footwear, on Thursday received the green light to purchase the assets and business associated with Edcon Limited’s Edgars Active and High Key brands.

Ackermans launches A-list Summer collection
12/09/2019 - 11:08
With winter’s icy grip on the country, it's hard to believe that summer is around the corner. The onset of warmer days means that it’s almost time to ditch the winter wardrobe and embrace a lighter, brighter one. However, selecting a summer wardrobe can be a daunting experience, as consumers are spoilt for choice and simply don’t have the time to sift through the top trends - particularly when on a budget.