In the first quarter of 2024, trading density levels across South Africa's retail sector dipped slightly as consumers grappled with high inflation and rising living costs.
However, the contraction rate was less severe than in the latter half of 2023. The Western Cape defied this trend, posting robust growth due to an influx of semigrants and tourists during the summer and autumn months.
This data comes from the latest Clur Shopping Centre Index, a benchmark derived from The Clur Report.
This report tracks performance across more than 4.1 million square metres of prime retail space in over 100 centres and 140 merchandising categories in South Africa and Namibia, providing vital insights for property funds.
In the Clur Shopping Centre Index, trading density indicates how much sales revenue is generated per square metre in a region.
The latest provincial indices for Q1 2024 reveal that the Western Cape and KwaZulu-Natal achieved the highest annualized trading densities of R45,460 and R42,676 per square metre, respectively, outperforming the national Clur All Centres Index of R41,163 per square metre. Gauteng lagged behind at R40,348 per square metre.
Belinda Clur, the MD of Clur International, noted that the Western Cape showed the highest year-on-year growth at 8.2%, with Gauteng at 5.9%, both exceeding CPI. KwaZulu-Natal, however, recorded a negative growth of -2.4%, underperforming CPI.
Nationally, super-regional centres (over 100,000 square metres) led with a trading density of R49,066 per square metre, followed by smaller centres (below 25,000 square metres) at R42,386 per square metre. Mid-sized centres are encouraged to adopt a lifestyle focus to better align with current consumer preferences.
In the first quarter, super-regional and regional centres showed growth rates of 5.4% and 4.7%, respectively, with super-regionals just outpacing CPI. Small regional centres increased their growth from 3% to 3.5% year-on-year.
Provincial performance varied due to factors like seasonality, semigration, stay-cations, civil unrest, and economic conditions. Historical data showed that Western Cape and Gauteng centres entered negative growth territory in March 2020, one month before the national index, with KwaZulu-Natal following in June 2020.
In 2023, Western Cape centres were top performers with a trading density of R44,965 per square metre and 9.9% year-on-year growth, outpacing CPI by 3.9%.
KwaZulu-Natal and Gauteng had trading densities of R42,783 and R39,924 per square metre, respectively, with mixed growth rates relative to CPI.
During the festive season, all three provinces saw stronger trading densities in December compared to November, with KwaZulu-Natal leading at R72,748 per square metre.
This highlights the significant impact of the December holiday season on retail trade in the region.
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