ATTENTION TO RETAIL By Jomiro Eming
On the whole, the South African retail industry is doing relatively
COSTLY CHALLENGES AND BARGAIN SOLUTIONS
well considering rising inflation and overall economic instability. The industry’s current value grew 10 percent in 2013, which
The retail industry had a tough year in 2014 with some of the most
Euromonitor.com puts down to competitive retail pricing and
devastating strikes South Africa has seen. The metal industry
aggressive retail marketing.
experienced an unprecedented five-month long platinum workers strike at the start of 2014, causing an economic decline to just 0.6
In the recent Deloitte 2014 Global Powers of Retailing report,
percent growth in the first quarter.
figures outlined the country’s local retail trends as representative of the international retail trends. It also revealed that some of
Metal workers went on another month-long strike in July 2014
South Africa’s top retailers - namely Woolworths, Shoprite,
which resulted in an industry reported year-on-year decline of
Steinhoff International Holdings (or JD Group), Pick ‘n Pay, and
20.4 percent for July of basic iron and steel, non-ferrous metal
Spar Group – made rankings in the World’s Largest 250 Retailers
products, metal products, and machinery, and a 29 percent
list and contributed about R48-trillion worth of revenue to the
drop of production at the factory gate for motor vehicles, parts,
global market between 2012 and 2013.
accessories, and other transport equipment. Both of these had an adverse effect on retail sales: Statistics South Africa (StatsSA)
A massive boost to the South African retail industry came in
released vehicle retail sales which shrunk by 5.9 percent in May
2013 with the corporate buyout of Massmart by United States
2014, and Shoprite reported R1-billion in lost-sales as a direct
retailer, Walmart. The R26.9-billion deal will contribute to GDP,
result.
job creation, and general economic growth in both South Africa and Africa. Consumers are also expected to save money thanks
The graph on the next page shows year-on-year changes in retail
to Walmart’s well-structured and globally competitive business
sales figures. The retail sector hit one of its lowest sales points in
model, meaning a potential inclination to increase spending.
the last four years and the climb in sales is significantly slower than usual, but the fact that there is a climb at all is positive.
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