Bumper festive season for malls
ALMOST 20%: APPAREL STORES REVENUE GROWS
But concerns linger around how load shedding and interest rates will affect growth this year.
The December 2023 shopping season produced positive results for most mall owners as consumers continued to rely on these centres for their Christmas shopping needs. Although some mall owners are still tallying up the true extent of activity seen during December, those Moneyweb spoke to shared positive sentiments about the period.
Earlier this week, JSE-listed real estate investment trust (Reit) and majority owner of Mall of Africa, Attacq, informed investors that the super-regional mall had recorded 12.7% growth in turnover in December 2023 compared to the previous year, while its footfall had risen by 9.6%.
On a month-on-month basis, December 2023’s performance across Attacq’s retail-experience portfolio rose by 40.3% from November 2023.
“This month-on-month growth exceeded the respective periods’ growth in 2022 of 35.6%, which could suggest that consumers are returning to more traditional holiday shopping patterns in December from Black Friday shopping during November,” the Reit said.
Typically, during peak shopping seasons, mega malls are forced to duke it out for consumer rands, as shoppers are enticed by the one-stop-shop offering these malls are known for.
The 2023 Christmas season was no different, with Pareto – owner of Pretoria mega-mall Menlyn Park shopping centre – saying the centre recorded double-digit growth in turnover and foot count metrics.
“Despite the challenging economic environment, Pareto malls continued to experience meaningful trading density growth throughout the 2023 shopping season, showing strong growth compared to the previous year and significantly exceeding pre-pandemic levels,” asset management executive of Pareto Muhammad Paruk said.
Pareto owns notable malls like The Pavilion Shopping Centre in KwaZulu-Natal, Cresta Shopping Centre and Southgate Mall in Johannesburg, and Tyger Valley Shopping Centre in Cape Town.
“Notably, the trading densities achieved during the 2023 shopping season have well surpassed the levels seen before the onset of the global pandemic. This signals a strong recovery for both Pareto and the broader retail industry, underscoring the resilience of Pareto’s assets but also the adaptability of the sector. The centres reflected increased foot traffic, longer dwell times, and higher sales across various product categories,” Paruk added.
Popular spots
Apparel stores received most of the consumer’s attention, according to Attacq, which notes a 19.4% growth in turnover year-on-year for the category in December last year.
The health and beauty category was the second-most popular, growing turnover by 15.4%, followed by restaurants (8.1%) and food takeout (7.4%).
A quiet movie schedule in December, resulted in a significant drop in cinema attendance for Attacq-owned malls, while the gaming sections of its shopping centres benefitted from the school holiday, registering 14% year-on-year growth.
Outlook
Load shedding, interest rate moves, the election and above-inflationary increases in property rates are just some of the issues top of mind for mall owners as we settle into 2024.
Although the severity of load shedding has eased in recent months and most commercial property owners have invested substantially in backup generation capabilities, Old Mutual Property CEO Sakina Nosarka, said the energy crisis will continue to be an issue until it is resolved.