Preston Gaddy, divisional director for strategic retail leasing for Broll Property Group, indicated that it is crucial that the malls ensure that their houses are in order.
“The guys start preparing three [or] four months in advance. Some of the centres set up a ‘joint operational centre’ where they’ll have additional police, medical personnel available. There’s a lot of preparation, a lot of meetings with stakeholders, local authorities, the marketing teams are all on duty, additional security, additional cleaners, additional parking attendants – they start planning that in advance,” Gaddy told CNBCafrica.com.
“Poor festive season sales can lead to casualties in the early part of 2014 as retailers increase stock holding, advertising, trading hours and employ more temporary staff, thus a disappointing festive season can be quite costly.”
EXTENDED SHOPPING HOURS
Gaddy added that the festive season remains an extremely important time of the year for both retailers and shopping centres.
“Particularly the busy time at the coastal centres, extended shopping hours have become a norm where most centres are open until nine o’clock at night in the peak week. You’re going to get 20 to 30 per cent more shoppers, with the extended hours you’re able to even it out amongst that time,” he said.
“It’s about ensuring that your security are all on duty, ensuring the bathrooms are kept clean, ensuring that there’s parking areas accessible, having people assist in the parking areas, your pay stations – ensuring that there’s enough change at the pay stations, having people assist at the directory boards to help shoppers find their way, particularly those from out of town.”
KEEPING THE HOLIDAY TRIPS LOCAL
It is also expected that more South Africans may opt for a local holiday rather than travel abroad this festive season.
“In our view, the rand/dollar, the rand/pound and the rand/euro exchange rate has got such exorbitant levels that there’s very few South Africans that can afford to travel abroad and have opted to rather stay. The coastal areas, the KZN and the Cape have become extremely popular for family holidays. To try and take a family to Europe over the festive season is going to be in excess of 120,000 [rand] whereas you can have a good local holiday for a fraction of that,” Gaddy explained.
“In my discussions with certain travel agents, they’ve seen a huge upswing in holidays in Southern African – Mozambique, Mauritius, Zanzibar – those areas have become quite popular as opposed to going across to Europe, the US or those destinations where they are being severely affected by the weak rand.”
GROWTH DESPITE THE WEAK RAND
While the rand has shown its limitations in 2013, Gaddy anticipates an average festive season growth of between three and 3.5 per cent across the board.
“You’re going to see the likes of the grocery chains posting fairly decent results. Semi-durables – fashion, items such as jewellery, electronics will also post some growth. Unfortunately with electronics, the prices have dropped so dramatically over the years that they’ve got to sell a lot more units to make the same kind of margins and turnovers,” he indicated.
“Certainly the areas that are going to struggle are your big ticket items such as furniture and appliances. Debt levels are at their worst in almost two decades and we are seeing that consumer indebtedness is rising at an alarming rate. Unfortunately it comes in when they have to pay their credit cards in January, February, March and don’t have the disposable income to service that debt.”
THE RISE OF ONLINE SHOPPING
Deciding on and purchasing gifts have been made easier in recent times with online shopping and the use of this device is expected to increase this festive season.
“Certain retailers have adopted a multi-channel approach. For instance the Mr Price group, they’ve adopted an online and in-store strategy where one can be purchasing the items online and then going into the store to collect them. With the proliferation of smartphones, consumers are becoming more tech-savvy and being able to investigate what purchases they want to make online and then heading off to the malls to actually purchase the items,” Gaddy said.
“Gift cards are always a viable option for those consumers who are not sure what to get for their loved ones. However, many shopping centres have done away with centre gift cards altogether due to the significant costs of running the system and the related bank charges.”