As a result, shopping appears to be more sustained rather than experiencing marked peaks and troughs, although naturally the key festive seasons in December and Easter holiday periods still attract larger volumes of shoppers and therefore increased consumer spend.
In addition, with consumer spend and more specifically the discretionary spend remaining under pressure for economic reasons, shoppers tend towards much higher frequency shopping in smaller volumes as opposed to the days when they carried out one major monthly shopping expedition.
In this regard the conveniently located neighbourhood shopping centres have benefited, as shoppers choose to visit easily accessible retail outlets more often, even once or twice a week. In line with this, retailers are keeping less stock, and restocking to suit changing consumer buying patterns.
While there have been no fireworks in the retail market, the shopping centres managed by JHI Properties have remained stable, with low vacancy levels which have in some instances even reduced.
We still manage to keep our vacancy levels on average lower than 4% and certainly have not seen an increase in these levels. The categories which we see as consistently best-performing are food anchors and value-offering department stores, which illustrates that in general consumers remain value seeking.
We are taking a somewhat conservative view of the remainder of the year (2013) and estimate that growth in retail turnover will be between 3 - 4.5%, mainly due to the fact that the spend did not materialse as anticipated over the past number of months and more specifically over the Easter holidays.
General consumer sentiment continues to be increasingly conservative and we believe this is largely due to high consumer debt levels (unsecured debt remains a concern) and inflation coming under renewed pressure due to a weakening rand. However, while foot count in general still reflects negative growth, we are seeing growth in spend per head and increased turnovers in JHI-managed shopping centres, in particularly in the greater Gauteng market.
Of major concern is continuing rising energy costs such as Eskom tariffs, and ever increasing costs imposed on the property owner by local municipalities, not only from a consumer perspective but also for retail tenants who seek to maintain fair profit margins while experiencing increasing levels of occupational and operating costs.
On a positive note, the first two phases of a substantial revamp of the Kolonnade Mall in Montana, Pretoria North have been completed. The space formerly utilised by the ice rink is being redeveloped, thereby significantly increasing the trading space for leading retailers Mr Price, Foschini and Truworths.
After the initial expansion of Greenstone Shopping Centre near Edenvale CBD in Gauteng, this centre is now in the initial stages of further extension, mainly for Woolworths, which will be taking up additonal space in excess of 1000m2.
