OLD MUTUAL PROPERTY INVESTMENTS
(OMPI), which counts malls such as Menlyn Park Shopping Centre in Pretoria and Gateway Theatre of Shopping in Umhlanga in its portfolio, is a happy Woolworths landlord.
When Woolworths opened a full-line store at OMPI’s upmarket Cavendish Square Shopping Centre in Claremont, Cape Town, the foot count (number of customers at the centre) increased by over 5% in the first month, says Colin Young, OMPI’s head of institutional investments. “The centre’s overall turnover grew by a whopping 55% that month, while its vehicle count grew by 22%,” he says.
“Given that there are no other grocery retailers such as Spar or Pick ’n Pay at Cavendish Square, it’s clear that Woolies filled a necessary gap in the centre’s tenant mix and the figures clearly attest to this,” says OMPI’s head of research, Belinda Clur. “The centre has always boasted an extensive apparel category, including Truworths, and a number of boutiques, which probably offered Woolies more competition from a clothing perspective.”
The positive effect continued over the long term, says Clur, as Cavendish Square's turnover grew by 47%, foot count grew by 10% and spend per head grew by 34% for the rest of 2003.
Whether Woolies is having the same halo effect on fellow retailers at township malls like OMPI's Umlazi Mall in KwaZulu-Natal (where the Woolies store opened in May 2006) is too early to tell, says Clur. “We’ve received positive feedback from consumers regarding the store, and those who frequent it have said that they’d like to see it expanded beyond its current 1 150m2 offering. We have yet to see whether the price levels at this store will be sustainable in this environment,” explains Clur.