The shoppers are back

South Africans rush back to the malls, but that doesn’t always mean they are there to spend a lot of money

ý SA consumers, many of whom are no doubt desperate to escape the confines of their homes following more than two months of lockdown, are flocking back to shopping centres.

Morné Wilken, CEO of Jse-listed mall owner Hyprop Investments, says so far in June the foot count (number of visitors) at some of its shopping centres is only about 2% below that recorded for the same period last year.

“So some of our malls are nearly back at pre-covid levels,” he says.

Hyprop owns several of SA’S largest retail centres, including Rosebank Mall in Joburg, Clearwater Mall in Roodepoort and Canal Walk in Cape Town.

says De Klerk.

While malls are seeing a relatively fast recovery in visitor numbers, that doesn’t mean that spending will necessarily bounce back equally fast.

FNB property strategist and economist John Loos argues it could take at least three years for retail sales to recover to pre-covid levels.

He says fear of crowded public spaces may well be less of a threat to SA mall owners than their US and European counterparts due to what is still the relatively low rate of deaths linked to Covid-19.

Even so, “virus-related consumer caution” is likely to postpone the purchasing of nonessential and luxury goods as well as lifestyle spending (dining at restaurants and visiting pubs, cinemas, ice rinks, bowling alleys and gyms) for as long as the virus lingers.

There is also the fear factor regarding the potential deterioration of household finances on the back of more job losses and business failures, which Loos believes could prompt a significant portion of South Africans to spend more cautiously over the coming months and save more instead.

It’s difficult to accurately predict the extent of the virus’s impact on consumer confidence and sentiment. But Loos says it is probably unrealistic to expect spending to return to pre-covid levels as soon as the lockdown is fully phased out — presumably before year-end.

He forecasts retail sales to dip by roughly 7% this year, followed by a 3.2% and 0.5% post-lockdown rebound for 2021 and 2022 respectively.

“So while the retail economy will indeed improve significantly from low lockdown levels next year, by 2022 the level of real household consumption expenditure will still be 3.54% below the level seen in 2019,” says Loos.

Some people have more spending money now given savings made on transport costs during the lockdown

Estienne de Klerk