Johannesburg - This holiday season is likely to ring in fair festive retail sales despite 2016’s frail and fickle economy.
This December’s retail trade could even be an improvement on last year, according to Paul Gerard of shopping centre developer and retail leasing specialists Flanagan & Gerard Property Development & Investment.
“Even with the current political volatility, macroeconomic indicators favour the festive trading season in 2016,” says Gerard.
He said 2016 has given consumers plenty of new retail space - especially in the Gauteng region - and boosted their choices with new international brands.
This festive season, he believes people will spend mostly on first-order goods, such as food, pharmaceuticals, services and clothing. In contrast, furniture and other discretionary purchases are likely to be least appealing to shoppers.
“Dominant regional shopping centres are best poised to attract spend,” says Gerard. He cautions that, even so, trading success relies strongly on a shopping centre’s relevance.
“Shopping centres that successfully compete for market share are those deeply rooted in their communities. They offer a mix of shopping, services and leisure that accurately reflect the community or region they serve. They also take part in more community involvement,” says Gerard.
Adding the seasonal bells and whistles to a festive shopping experience can also help support good holiday trade.
“Décor itself plays a small part in driving festive trade. People are generally aspirational and favour shopping environments that are more elegant and engaging. Depending on the community in which a mall is located, entertainment can contribute to promoting festive spend,” he says.
As for online shopping, he says it still plays a very small role and only in higher-income areas within metropolitans, so it won’t have a significant impact on bricks-and-mortar retail this summer, in his view.
Beyond the festive season, Gerard’s outlook for retail property in 2017 is positive as the shopping centre industry continues to advance.
“As the information revolution continues, the shopping centre mix evolves. Service-based retail will continue to become more prominent. In addition, multichannel and omni-channel retailing will become more prevalent," he says.
"Retailers will offer all forms of shopping and do so in a more integrated way. For example, offering online shopping with click-and-collect options from bricks-and-mortar stores.”
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