'Per capita spending bolsters trading performance'

"Average trading density and turnover growth remains relatively buoyant compared with the historical average and is particularly strong in the smaller retail centre segments," the Q3 retail trends report revealed.

Whereas per capita spend growth in shopping centres was below inflation levels throughout 2010 it has steadily improved and now reflects modest real growth.

The relatively strong growth in disposable income of around 5% recorded in the first half of 2011 has also been supportive of the per capita spend trend.

"Also of positive influence is the decline in debt servicing costs mimicking the lower interest rate regime," the SAPOA and IPD said.

Key factors

The report also noted that key factors behind the success and expansion of South African retail remained certain "non-negotiables" including underlying economic growth, rising disposable incomes, falling unemployment, increasing urbanisation and the emergence of a black middle class.

With 2010's real growth rate of 2.8% forecast to increase to 3.2% over 2011 as the economy continues to recover, another key ingredient supporting GDP per capita growth over the next five years will be the population increasing from an expected 50.5 million in 2011 to an estimated 51.7 million in 2016, it said.

Moreover, although current retail sales growth during the third quarter of 2011 was above inflation levels, it is nevertheless growing at a slower rate than anticipated by consensus forecasts.

"This no doubt reflects a certain degree of hesitation in consumer confidence and notwithstanding the improved debt servicing costs, a big theme remains the 'de-gearing' of consumer debt levels going forward, which in turn is likely to weigh on any significant improvement in the retail sales environment.

"Household consumption expenditure is anticipated to come in at 4.4% over 2011 and roughly in line with what transpired in 2010," it added.