Are SA retailers staring into the abyss?

According to a recent article in Business Day, South Africa’s once blue-chip retail giants are reeling in tandem with the economy as the glory days of retail fade.

• The latest megamall is Fourways Mall. It cost R9-billion to revamp, has 450 stores and is the size of 20 rugby fields
• Fourways Mall is now bigger than Midrand’s Mall of Africa
• This is bad timing in a country with economic growth rate of 0,9%
• South Africa’s unemployment rate stands at 29% – meaning few people have income to spare
• Welfare payments to SA’s 18-million beneficiaries are set to grow by less than inflation
• Online shopping trends also pose a threat to retail
• The share prices of the largest SA retailers are down
• Mr Price is down 24% over the past year
• Grocery pin-up stock Shoprite is down 45%
• Massmart, which owns Game and Makro, is 61% lower
• Truworths is down 41%
• TFG, which owns Foschini, is down 17%
• Dis-Chem is down 34% over 12 months
• Pick n Pay is down 21%
• Both national and international retailers are faced with downsizing (such as Edgars) or closing (such as Toys ‘R’ Us)