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Future of Gauteng tourism could lie in shopping

May 01 2016 15:26

Johannesburg - The future of Gauteng's tourism might very well lie in shopping, according to Unathi Sonwabile Henama, who teaches tourism at Tshwane University of Technology.

In his view, the opening of the Mall of Africa with around 300 stores will make Gauteng the shopping mecca of South Africa.

The Mall of Africa is billed as South Africa’s largest shopping mall ever built in a single phase, with 130 000m2 of retail space available and built by property development company, Atterbury.

"The Mall of Africa was abuzz with many customers that sought to benefit from the opening specials on the opening day, April 28 2016. The mall has opened at a time when South Africa’s economic growth is projected to be less than 2% - not inspiring for an economy that is driven by consumer spending," said Henama.

"The mall opened its doors to a country with an unemployment rate above 25%, and one of the most unequal societies in the world. The economy is not only ravaged by a low economic rate, the mining industry, has been culling jobs as commodity prices have fallen, throwing many communities and towns into economic distress."  

He pointed out that the loss of jobs in mining is felt in other industries, and the general saying in South Africa is that when mining sneezes, the economy catches a cold.

The mall also opened to multitudes of customers during a period when the SA Reserve Bank has been increasing interest rates as a means of curbing inflationary pressures. The raising of interest rates reduces disposable income available to spend in the economy, an economy on life support.

READ: Tens of thousands of consumers descend on Mall of Africa

The savings rate of households remains insufficiently low to stimulate the economy, as noted by the SA Reserve Bank’s Quarterly Bulletin September 2015. It noted that the gross savings ratio of households was 0.2% of the gross domestic product (GDP). South Africans continue to be highly indebted, and the government was forced to introduce the National Credit Act, to curb reckless and irresponsible lending, which was subjecting people to modern day slavery.

"South Africans are mall people, they spend a disproportionate amount of time in the malls. The growth of shopping malls, has seen them going from mere shopping places to entertainment centres that offer a shopping experience, with the intention of increasing your length of stay and expenditure in the malls," said Henama.

"The sheer growth of shopping malls, led to a skills shortage for shopping mall managers. South Africans will continue to visit their beloved malls, but what is certain is that the Mall of Africa will cannibalise visitors from other malls."

In his view, this may soon change with the finalisation of the R2bn redevelopment of Menlyn Mall, and the casino development at Menlyn. In the event that domestic demand is not robust, shopping malls must promote shopping tourism just like Dubai and establish Gauteng as the shopping hub, he pointed out.

In a report by PwC titled South African Retail and Consumer Products Outlook 2012-2016, it noted that Africa is viewed as an opportunity of expansion.

"The shopping malls must look beyond our borders for diversifying the customer base, by seeking to attract regional tourists that frequent South Africa more than international tourists, said Henama.

"In addition, regional tourists already participate in shopping tourism in South Africa, as shopping is one the main activities when they visit South Africa. Shopping is an activity almost all tourists participate in when they visit a destination country, coming after accommodation, as the second highest cost expenditure activity."

Because the majority of regional tourists to SA arrive by road instead of air, the quality of their experience remains abysmal at border posts, especially at the Beitbidge Border Post, in his view.

"South Africa must roll out the red carpet for regional tourists, and give them a 'wow' experience, so that they return and spend more money," he added.

"One area that the majority of shopping malls are failing to do is to respond to the growing Muslim population by offering prayer rooms so that Muslim customers are able to shop and still perform the mandatory five times a day prayer."

* Unathi Sonwabile Henama, teaches tourism at Tshwane University of Technology, but comments here in his personal capacity.

ALSO READ: Mall of Africa rush shows consumer 'delusion'

gauteng  |  tourism  |  mall of africa  |  sa economy  |  retail
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