East London retailers feel cold wind as shopping habits shift

Rising food and fuel prices hit mall numbers amid car pooling and smaller grocery baskets

With municipal costs now higher than rent, a number of shops in Vincent Mall are mulling whether they can afford to keep going.

This is the stark reality presented by mall manager Joseph Parsley at Border Kei Chamber of Business’s monthly manufacturing, economic affairs & trade committee meeting this week.

While there were a number of things for the meeting to celebrate, there were several clouds in the sky as well.

Escalating overheads could well bring down some of the businesses under his roof soon, Parsley said.

Small businesses without deep pockets have had a bleak few years, with Eskom’s loadshedding nightmare following almost straight after two years of Covid lockdowns.

However Vincent, in terms of the national averages, was doing relatively well and was managing to hold on to its tenants.

It had a 0.5% vacancy rate, against the 3,5% national benchmark.

Interest rates, in his opinion, might not come down until the second quarter of 2025.

Food prices have surged — some between 15% and 18% — and shoppers are hunting for special offers and downgrading their basket of goods.

Fuel price rises were curbing normal shopping patterns too. Shoppers were pooling cars instead of taking one-person trips to the mall.

This impacts on the vehicle count as well as shopping expenditure.

Mall restaurants are likely to trim menus and prices, with special offers.

Luxury goods and entertainment stores would also feel the pinch.

Kirsten van der Merwe, of Rohlig-grindrod, was happy to announce the company has won a Mercedes-benz SA shipping contract.

Dimming the joy, shipping lines have imposed a $250 surcharge on containers, putting pressure on manufacturers battling to keep costs down.

Dirk Botes, of the Port of East London, had mostly positive news in his reportback.

A R60m contract to install a desalination plant on the western side of the harbour wall went to Impact Water Solutions and Norland Civil Engineers and Contractors consortium.

Construction is scheduled to start in 2026 and the estimated 0.5 mega litres of pure water per day should flow by 2030.

There are several other projects on the drawing board, including the deepening and widening of the harbour, a solar project, the upgrade of Latimer’s Landing, and fencing the harbour area.

Volume of goods leaving and arriving was down by 8%, blamed mainly on load-shedding.

Vehicle imports were down 19% but exports, driven mainly by MBSA, were holding steady, though the port anticipates an overall reduction in 2024.

A new manganese exports contract was living up to expectations after a slow start.

Livestock had accounted for one ship to the United Arab Emirates and two to Madagascar.

Livestock had been shipped for over 20 years, and the port prided itself on the fast turnaround of the ships, yet it remains a controversial area.

Another source of revenue is the ship repair yard, which has such a high occupancy that it even turns away jobs.

At King Phalo Airport good news was also dominant. Passenger flow was up 141%, mainly due to the Easter weekend and returning families.

The impact of Cemair’s new flights is still to be measured.

Business people with interests in Gauteng can now leave Phalo at 6am and return on the same day at 7.30pm.

Since 2023, when airlines servicing East London dropped from five to three, business travellers have had to raid their travel budgets staying overnight in Johannesburg if they wanted to get in a full day’s work because the last flight left so early.