Consumer spending increases despite tight economy

Consumer spending increases despite tight economy

Johannesburg, Wednesday 20 September, 09:00

Despite challenging economic conditions, retail sales growth for July 2017 was the highest recorded for that month since 2015. This is according to the Mastercard SpendingPulse™ report, a macroeconomic report tracking retail sales launched today in South Africa.

Sarah Quinlan Photo: John Thomé

Nominal (not adjusting for price changes/inflation) July retail sales grew 7.2 percent versus the same month last year, marking the 55th consecutive month of positive growth. Volume retail sales – which removes the effects of inflation – for July also saw a positive increase of 2.3 percent year-over-year, indicating that consumer spending remains resilient, despite higher consumer prices.

The continued growth in retail sales in July is encouraging, and points to a slight improvement in the consumer economy as the country emerges from a technical recession,” says Sarah Quinlan, Senior Vice President and Group Head of Market Insights for Mastercard. “South Africa’s consumer has shown resilience in the face of weak wage growth and high unemployment, reported at 27.7 percent in the second quarter.”

The average growth rate of the past three months was up 2.3 percent year-over-year, slightly above the 2.1 percent growth rate in the second quarter of this year. For the past 12 months, volume retail sales are less favourable, growing by only 0.2 percent. This is slightly underperforming GDP, which rose 0.3 percent in 2016 and is forecast to increase to 0.7 percent in 2017.

While consumer spending is showing signs of recovery, South Africans still face a challenging macro-economic environment. The economic health of the consumer warrants close monitoring as the economy looks to regain its footing,” says Quinlan.

Mastercard SpendingPulse South Africa reports on national retail sales and uses aggregated and anonymous Mastercard transaction data, coupled with survey-based estimates for other payment forms including cash and cheque, to offer insight into consumer spending trends and the South African economy. Available to subscribers on a monthly basis, the report also includes an overall retail sales and price index to illustrate whether spending growth is being driven by increased shopping or by inflation or increased promotions.

The consumer is in charge” – Sarah Quinlan

Providing both timely and insightful data on retail spending trends, Mastercard’s new monthly macro-economic report will offer an early overview of market indices to help retailers, investors, card issuers, banks and government agencies in their decision-making processes,” says Mark Elliott, Division President for Mastercard, Southern Africa.

In addition to reporting trends for the retail sector as a whole, the inaugural SpendingPulse South Africa breaks out sales growth trends for General Dealers, and Pharmaceutical, Medical Goods, Cosmetics and Toiletries. These sectors together account for over half of South Africa’s retail sales volume.

Pharmaceutical, Medical Goods, Cosmetic and Toiletry sales have outperformed other retail segments over the past 12 months, with sales volumes rising 3.4 percent. However, momentum has weakened since the start of the year, with sales volume in July rising two percent year-on-year, slightly slower than retail as a whole. Price inflation for products and services in the health sector accelerated from 5.3 percent year-on-year for July 2016 to seven percent for July 2017.

On the opposite end of the spectrum, General Dealer sales have underperformed, with sales volumes falling 0.3 percent year-on-year in July, and the value of retail sales down 1.1 percent over the past 12 months.

Consumers spent less and consumed less, partly because inflation has eroded their spending power. South Africa’s CPI increased 4.6 percent, driven largely by a 6.8 percent rise in food prices,” says Quinlan.

Turning to global travel, Quinlan noted that, in terms of global travel, the US spends the most on air travel. “Americans are not shy to travel long distance,” said Quinlan. “And with the exchange rate in their favour, coupled with the fact that Americans spend up to ten time more than Asians when travelling, makes tourism a prime growth opportunity for South Africa.”

The tourist-spend in the country by foreigners naturally contributes directly to all aspects of retail growth in the country.

Mastercard SpendingPulse reports will be available monthly in South Africa from September.

Mastercard SpendingPulse™ reports on national retail sales and is based on aggregate sales activity in the Mastercard payments network, coupled with survey-based estimates for certain other payment forms, such as cash and cheque. SpendingPulse™ reports and content, including estimated forecasts of spending trends do not in any way contain, reflect or relate to actual Mastercard operational or financial performance, or specific payment-card-issuer data. SpendingPulse is provided by Mastercard Advisors, the professional services arm of Mastercard.

Complete parking and access solutions by SKIDATA

Complete parking and access solutions by SKIDATA

Whether commercial property owners wish to control the vehicular and/or pedestrian access to their properties, or desire to initiate revenue generating parking as another income stream for their business, SKIDATA offer a total solution to solve the problem or meet the requirement.

Since entering the South African revenue generating parking market in 2013 the company has enjoyed four highly successful years of providing commercial property owners and landlords with world class vehicle and pedestrian access solutions to the parking and stadium event markets.

SKIDATA South Africa have also initiated a process where – through its human skill set, coupled with its world class hardware access products, systems and powerful software, fully qualified project implementation, installation and commissioning, plus after sales service via their SKIDATA Care packages, the company is positioned to provide the right solution to solve the problem or meet the requirement.

The SKIDATA client and customer journey

However, the creating of the “right” solution starts with the commercial property owner acknowledging that they do indeed have a problem and they are looking for a suitable solution provider to provide the “right” solution, then having received the enquiry from the client (or operator if there is one), the process begins with a member of the SKIDATA commercial team meeting the client on site to personally see the site, discuss and review the problem and be informed of the clients’ requirements.

This is the beginning of the SKIDATA Client and Customer Journey.

SKIDATA South Africa have highly experienced and knowledgeable sales and commercial executives based in Johannesburg serving all the inland provinces of Gauteng, Mpumalanga, Limpopo, North West, Free State and Northern Cape and in Cape Town serving the coastal provinces of the Western and Eastern Cape and KwaZulu-Natal.

The SKIDATA ethos is to partner and work closely with its clients to realise the solution – which far exceeds the traditional concept of car park management – and so much more. The SKIDATA total solution features a 360 degree perspective that takes not only the clients’ needs into account, but also the needs of the guests and customers who utilise the car park.

The flexible SKIDATA total solution makes it easy to increase the satisfaction of the clients’ guests and customers beginning with the individual components of the solution.

Today customers are demanding more and more: more comfort, more adventure, more pleasant surprises. SKIDATA sees parking customers in a holistic context, and hence takes the following into consideration:

  • Location and type of preferred technology,assisting the client in selecting the correct type of technology system (Pay on Entry, Pay at Ext, Central Pay or Pay on Foot) for the required site, with the correct Bill of Quantities for the access system.

  • Benefits and loyalty programmes, where guests and customers can enjoy discounts which can be redeemed while shopping, or visiting a restaurant.

  • Relaxed Departure, where SKIDATA makes it easy for the guest or customer to pay for parking and extras by offering an understandable and easy-to-use payment system and a variety of payment methods. Show visitors the way back to their vehicle quickly and directly using automated information above the parking space.

  • Pleasant Memories, where guests and customers are treated to the same excellent service on the return trip that they did upon their arrival, reminding them of the good service experience when they get back home with special offers or new information about the attractions in the centre.

  • Enjoy the Rewards, where loyal guests and customers are pampered and rewarded with gifts and incentives such as VIP parking space for their next visit, or that the guests and customers have their vehicle parked for them by a Valet Parking Service.

In order to perfectly serve and impress the clients’ guests and customers along the entire Customer Journey, SKIDATA offers a total solution consisting of:

  • Comfortable and reliable access systems;

  • Revenue-increasing marketing and sales channels;

  • Perfect integration of add-on systems;

  • Optimised business process; and

  • Professional data and reporting management.

With SKIDATA the solution always remains flexible, customising the solution together with the client to meet their individual needs and enhance the selected system with tailored add-on options. Thus the client benefits from a well-conceived, total solution from a single source and a single point of contact.

A total solution with continuous innovation

Since 1985, SKIDATA has revolutionised the car park management market throughout Europe with new products and services, such as direct entry and exit with a credit card, illuminated multicoloured barrier arms, colour coded directional indicators on the barrier head, the first database-driven system, interface concepts for the integration of additional solutions, as well as flexible data carriers and the self-monitoring and automation of software.

The continuous focus on innovation and development at SKIDATA lets the client benefit from the latest technologies and services throughout the entire life cycle of the right solution.

Technology Solution Design

Access Investment security thanks to comfortable and reliable access systems.

SKIDATA can assist with the design of the technology solution paying specific attention to:

High Performance” Access Technology, at over 8 500 installations worldwide in over 100 countries – including 46 in Southern Africa – clients and operators are benefiting from SKIDATA car park management, from simple system solutions to complex, interconnected network installations with several hundred devices.

Here SKIDATA access components: Power.Gate, Lite.Gate, Barrier.Gate, Keytag.Gate, and PlateTech.Logic convince through their scalability, durability, speed and comfort.

For all of its solutions, SKIDATA puts great emphasis on a modern, usability-oriented design.

Payment Made Easy, whether at the manned cash desk Manual.Cash, the automated payment machines Easy.Cash, Power.Cash with cash and cashless credit card facilities and Credit.Cash, or directly at the exit with a range of cashless payment methods such as Tap & Go, with SKIDATA the client can offer to guests and customers the easiest operation and a wide range of payment methods.

SKIDATA offers a wide range of access media types where diversity is also present. Whether for short-term Barcode Tickets, that are printed at the entry column Power.Gate with individual announcements for casual parkers, RFID Cards for monthly tenant “contract” parkers and 2D barcode and Print@Home QR readers, or the utilisation of license plate technology, all SKIDATA data carriers are characterised by the highest security with regards to encryption and data and also offer the best performance and multipole printing options.

Integration to 3rd Party Add-On Systems, where SKIDATA offer a single point of contact for a prefect fitting and seamless integration with systems such as Digital Intercom and CCTV systems, Bay Monitoring or Parking Guidance systems and License Plate Recognition systems.

Powerful Software, which is the driving engine of the entire system, with the perfect combination of the Parking.Logic management software and all hardware components, the Parking.Logic software is the core of the SKIDATA car park management solution.

With a large number of optional modules, extensive configuration possibilities and numerous interfaces for the integration of additional systems, Parking.Logic perfectly meets clients’ needs. The annual software upgrades continually extend the functionality of the solution and make the investment future-proof.

Meaningful Reporting, where SKIDATA makes smart tools available for the client to manage the parking business perfectly and provide reporting solutions that provide access to all the data such as turnover and number of parking customers.

Project implementation, installation, commissioning, training and after sales service

Efficiency increase through targeted optimisation of operational processes.

Certified SKIDATA experts with industry know how and knowledge manage the complete project with the liaison with the professional team specifically from the planning of the required network and switches, the location and design of the entry and exit lane civil works and automatic payment machine locations, to the installation of all hardware devices, connection to the network, commissioning of the entire technology system, handover and training of the operator and or client.

SKIDATA South Africa offer a Maintenance Contract with every commercial proposal, whereby after the First Year Warranty, we provide the cost of the next four years’ preventative maintenance via the SKIDATA. Care packages. All maintenance and repairs are carried out by qualified technicians and certified engineers who have all been trained at SKIDATA AG in Austria.

We strongly believe that this investment in technical services provides the peace of mind that clients’ require to enhance their considerable investment in the overall access and payment technology solution.

Conclusion

SKIDATA relentlessly revolutionise the industry with innovation, inspiration, and simplicity to thrill its clients’ worldwide with perfectly fitting solutions, valuable data and outstanding service.

For further details on SKIDATA Parking and Access Solutions in South Africa contact the Head of Sales and Marketing, Derek Morris on (w) +27 11 447 8698, (m) +27 82 363 4508, or (email) derek.morris@skidata.com

Retail solutions on-demand

Retail solutions on-demand

It’s comforting to know that next time you need your shopfront re-designed, shopfitting redone, new signage – or any other retail service – that there is a one-stop professional company on hand to assist at a moment’s notice.

Based in Midrand, BluChip Retail Solutions is headed up by CEO, Brett Stagman. The company is made up of specific divisions for each discipline, each managed by a professional in that field, resulting in a group with design and implementation capabilities second to none.

We live in an on-demand economy and BluChip Retail Solutions is a company that offer end to end solutions, support and service,” says Stagman. “ We are able to transform your dream into a reality with our extensive range of services.”

What differentiates BluChip from its competitors is that the company is able to handle all your retail positioning needs.

Irrespective of the project BluChip has a team of dedicated, committed individuals who are able to offer you the specific services and solutions that you require.

Just some of BluChip’s extensive services include:

Design Services: Liezl van der Linde

An experienced team of Interior designers, architects and industrial designers able to provide a full turnkey design solution.

If you can dream it BluChip can design it.

Digital Services: Chantal du Preez

BluChip are experts in digital display and content management. In the digital world BluChip is inter connected through media, digital devices and digital marketing services.

Shopfitting Services: Simon du Plooy

Each project is approached professionally and individually. An integral part of the cycle is BluChip’s state of the art manufacturing facilities which ensure that deadlines are met.

BluChip is very much “hands-on” in every aspect of every project.

Installation and Civil Services: Dion Mclean

Imagine an empty shell of a space. BluChip Retail Solutions will transform that space into a functional area regardless of your requirements. The company prides itself on providing an entire solution to all industries, thus creating your niche brand in the market.

Project Management Services: Mark Kinnear

By offering a full turnkey solution and covering most store build deliverables in house, BluChip is able to reduce costs immediately, working within your budget to deliver the best solutions.

Retail Maintenance Services: Vernon Gravett

BluChip have developed an extensive network of skilled technicians and subcontractors capable of assisting in all maintenance and project requirements, from shopfitting and shopfronts to digital and civils. Service levels are individually and appropriately designed to suit clients’ needs nationwide.

Steelwork Services: Jonathan Joseph

BluChip designs and manufactures products to specific requirements, versatile, modular, flat packed products are a speciality. A high standard of workmanship with top quality finishes is always assured.

Signage Services: Sakkie Huysamen

BluChip Retail Solutions offer a full turnkey signage solution and services. This incorporates all internal and external signage as well lettering and all types of signage applications.

Retail Property Advisory Services: Adam Bravo

BluChip Retail Solutions are leaders in strategic and property facilitation within South African retail market, with over 1 000 lease agreements under management. The involvement of the turn-key facilitation and a developing focus on retail consultancy provides the edge within this market.

Virtual Reality (VR) Services: Chantal du Preez

BluChip is able to customise a full 360 degree VR fly through of your retail store experience. This will enable you to see an holistic view of your store, determine planograms, understand departmental flows and modify any materials.

Biometrics Services: Conrad Taljaard

Biometric verification is any means by which an individual can be uniquely identified by evaluating one or more distinguishing biological traits. Unique identifiers include fingerprints, hand geometry, earlobe geometry, retina and iris pattens, voice waves, DNA and signatures.

Services provided by Recyclers

Services provided by Recyclers

Getting rid of stuff

By Reg Barichievy, Smart Waste

As long as mankind continues on its present path there will be waste – most of us love the toys and we consume way more than we should. And for long there is waste there will be a need for a recycling service.

Recycling separates the general waste from the materials, which although they may look like waste, can be re-used. The general waste – the stuff which must be disposed of – is the broken and yucky stuff, broken glasses and nappies. Mixed up with the general waste is however a treasure trove of stuff which can be recycled.

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If one picks through a wheelie bin and takes out the recyclable materials one can reduce the volume of waste by between fifteen and ninety percent. The factors which cause the variation are the location of the wheelie bin eg in a factory with a lot of packaging or a home or a shopping centre. Other factors include the time of year eg when stocking shelves in a supermarket or after Xmas at home the wheelie bin will probably be completely full of recyclable material.

A good average to start with would be to extract thirty percent by volume of each wheelie bin. The resulting decrease in the cost of removal and the saving in landfill space is immediate and can be considerable. A waste management company which offers recycling can provide this service.

The modern recycling specialist however goes a lot further than sorting and recycling general waste. A good recycling specialist will assist the client in finding alternate uses for its waste product. There is always a solution, although some may not be practical or feasible, usually because of cost.

Training staff and management and assisting with waste reduction programs is an important part of putting an organization on a greener path. This extends to awareness programs and incentive programs for staff, learners, projects and organizations.

If you can’t measure it you can’t monitor it”, goes the saying so providing monthly reports on the volumes of general waste and the mass and type of recyclable being produced by a client provides management with a tool to measure the efficiency of its process.

In addition the recycling specialist will offer an independent certification that hazardous materials have been safely disposed of and provide a record of how waste is treated and disposed of, part of the “cradle to grave” record which is becoming more important.

The recycling specialist of today does so much more than the hump and dump of waste which used to pervade much of society – and still does – in some places.

As long as we choose to consume so much we owe it to ourselves and to our environment to ensure that we are recycling as much as we can.

REITs well-placed to weather SA’s current economic and political volatility

REITs well-placed to weather SA’s current economic and political volatility

Downgrading to junk status and ongoing political tomfoolery might make South African investors a little anxious about protecting their investment portfolios against the market volatility resulting from the uncertainty created by the current environment. 

But, as the South African Real Estate Investment Trust Association (SA REIT) points out, REITs are relatively well-placed to weather the expected instability, making them an excellent hold during periods of volatility. 

In spite of these uncertainties, REITs are forecast to post total returns in the range of 8% to 10% for 2017.

Izak Petersen, SA REIT Chairman

 It is important to realise that many SA REIT counters were aware of the possibility of a rating downgrade and had planned accordingly,” says SA REIT Chairman Izak Petersen, who is also CEO of Dipula Income Fund. “This is where the benefit of experienced and professional management can be clearly seen.”

 

Offshore diversification is one strategy that local REITs are also employing. 

SA REITs currently have offshore exposure of about 30% to 40% of their earnings,” explains Mark Stevens, Chairman of the SAREIT Marketing Committee and CEO of Fortress Property Fund. “This provides a buffer against local market uncertainty and serves as a Rand hedge.” 

Interest rate hedging is another strategy. 

REITs in South Africa have on average typically hedged about 80% of their interest exposure with the hedge expiry profile being three- to four-years, making them less vulnerable to interest rate fluctuations due to a volatile Rand. 

And finally, low gearing levels in the sector ensures REITs are resilient to fluctuations. 

With low loan-to-value (LTV) ratios and strong balance sheets, REITs are able to wait out market ebbs and flows, and perform well over the longer-term horizon,” points out Petersen. 

REITs have in fact consistently outperformed other investment sectors in the last 20 years. 

Compared to the 16% average return generated by equities over that time, listed property has achieved a 19% average return,” explains Petersen.

The SA REIT Association represents the South African listed REIT (real estate investment trust) sector, which is one of the most active and innovative sectors on the JSE. SA REIT members comprise all listed SA REITs and represents a market capitalisation of around R400 billion. The quality of these REITs influence our economy and the quality of people’s lives.

2: Image: kfsa.co.za

Pick n Pay launches online distribution centre in Gauteng

Pick n Pay has just launched its online distribution centre in Gauteng, the first of its kind in the province. This follows the opening of its Cape Town online distribution centre, which made it the first major brick and mortar grocery retailer in South Africa to serve its online consumer customer base with a dedicated fulfilment centre.

Our new distribution centre will enable us to significantly improve service to our Gauteng online shoppers,” said Richard van Rensburg, Deputy CEO of Pick n Pay. “At the same time, our online distribution capacity is significantly increased, enabling us to handle the rapid growth we are experiencing in online sales.”

Evolving the online shopping experience through a multichannel approach

This distribution centre represents a significant investment in Pick n Pay’s online business, which is one of the fastest-growing divisions in our business, and represents a conviction by the company about the long-term opportunities from online,” said Van Rensburg.

It is the next step in our journey to build an advanced, convenient and simple omnichannel shopping experience for our clients. Later this year, we will launch a new online shopping website and an upgraded version of the Pick n Pay mobile app.”

Michael Cotterell, head of Pick n Pay Online, added: “We were encouraged by the performance of our dedicated online facility that was opened in Cape Town 18 months ago. We experienced a significant acceleration in sales growth after the facility went live, and we are confident our Gauteng customers will benefit from a similar facility.”

Advantages for the Gauteng online shopping customer

In the past, orders placed by Gauteng customers via Pick n Pay Online were fulfilled by a store close to the customer’s location. “There are significant advantages to serving customers with a dedicated facility instead of picking online orders from a store near to their delivery location,” said Cotterell.

Firstly, availability improves as online customers are not competing with customers in store for products. Secondly, freshness improves as the supply chain is shortened and the integrity of the cold chain is enhanced. Products move directly from our distribution centre to the customer and do not go via a store, thereby improving shelf-life for customers. Thirdly, we are able to significantly increase the range of products we offer to our customers. Our facility has the capacity to hold almost three times the number of product lines as a regular store. Our aim is to offer our online shoppers the widest range possible from Pick n Pay.”

Today’s online consumers want convenience, affordability and choice”, said Van Rensburg. “That’s what our new Gauteng fulfilment centre is able to give them.”

Marketing in a recession and beyond

Marketing in a recession and beyond

People don’t stop shopping it’s just the consumer’s behaviour that changes

By Gill Randall, Joint CEO of SPARK Media says that markets don’t stop in a recession.

Gill Randall

Through our membership of the Ehrenburg Bass Institute (EBI) for marketing science, we have access to consumer behaviour tracked from way before, during and post the previous recession, and that data has revealed very clear shopper insights. One of the biggest lessons we’ve learned is just how habitual consumers are.

Consumers find it difficult to modify their regular behaviour. So in belt tightening time, they find it much easier to change non-regular behaviours. Regular behaviour would be defined as going out for lunch or coffee or shopping at their favourite stores, they’ll continue to do this, but just at a reduced frequency or expenditure level. Non-regular behaviours, however, like buying big appliances or re-decorating will be postponed or discarded.

The 2008 – 2009 recession resulted in purchase declines across all categories, with the after effects felt and seen in continued declines up until 2013. As the economy recovered, purchasing again picked up between 2013 and 2016 showing increased purchases across most categories.

But even during a recession, life continues to happen: appliances and cars that break down still need to be repaired or replaced, people still get married, move houses, start families, change jobs and so on, money will still be spent, again, just at a reduced level and frequency.

Thinner markets mean that less people are actively buying at any given time. They’re spending less and buying less frequently which generally means that smaller marketing budgets have to work harder. And along with tightening budgets, consumers are also extensively searching for bargains, therefore an increased mental availability for brands in tough times do go a long way in getting those much needed sales.

This is where the now generally accepted ‘reach’ and ‘continuity’ strategy becomes ever more critical. Less active shoppers, shopping less frequently must equate to advertisers adopting a wider reach of the whole category more often (continuously) to maintain conversion rates of available share of wallet.

Additionally, in good times and in bad, the principle of Share of Voice (SOV) applies – so marketers whose ad spend is above (or below) their relative market share tend to improve (or decline) in overall market share during these times. That’s why holding or, (yes please), raising your ad spend in a recession generally leaves your brand’s market share better off at the end of a recession than at the start. It’s simply a matter of SOV. But, if budgets are to be cut, don’t stress too much – competitors are more than likely in the same boat, but do try to ensure the retention of relative SOV.

Extensive EBI analysis shows that at best 50% of a brand’s business comes from regular shoppers and that better than 50% comes from the balance of buyers in the category. The bottom line is that target markets are not just regular shoppers, it’s all buyers in the category. Aim too narrow and ads won’t be seen by the big groups of flirtatious customers!

Local papers remain the only real mass reach print media available. ROOTS 2016 shows that 63% of urban decision makers read their local paper versus 25% of any other daily newspaper or 22% of any other weekly paper.

To sum up, in a recession purchases are fewer and further between than normal and the ratio of ‘need’ purchases to ‘pleasure’ purchases is far higher. Shopping is also less planned and more random. Random shopping can happen anytime, so brands need to be in the market continuously to attract the buyers as they consider their choices amongst a myriad brand offerings.

Shifting consumer habits behind growth in global eating out market

The increasing presence of food and beverage (F&B) options in shopping centres – often accounting for more than 20% of units in new and redeveloped schemes in more mature markets – is being driven by rapid global growth in consumer spending on eating out, according to a new report from Cushman & Wakefield.


With spending on eating out expected to continue growing over the next 10 years, and consumers’ desire to enhance a shopping trip with social and leisure experiences, a compelling F&B offer is now critical to the success of any retail scheme, the report states.

All four global regions examined in the report are forecast to experience growth in F&B expenditure, led by Asia Pacific and the Middle East and Africa. Based on data from Oxford Economics, consumer spending is forecast to nearly double in the latter (US$182.5bn to US$363.5bn) and more than double in the former (US$1,052bn to US$2,296bn). As such, F&B spend is forecast to grow at an annual average of 7.4% up to 2026 in both regions.

As spending increases, customer expectation does too. Once-ubiquitous food courts, made up of common seating areas surrounded by fast food outlets, are a dying breed. While mainstream brands – with ability to pay higher rents – still dominate, landlords are recognising the importance of diversity and other concepts, such as the food hall, have evolved, while there is also a move towards creating different zones within shopping centres.

However, Cushman & Wakefield believes there is latent demand for more non-mainstream international food hall market place concepts, which combine restaurants with food and beverage counters and bakeries, along with the sale of cooking-related products and even cookery schools to add ‘edutainment’. Currently, only a handful of truly international players offer such a format and there is scope for more high-quality operators to emerge and enter new markets.

Nomzamo Radebe, CEO of JHI – part of Cushman & Wakefield Excellerate

Nomzamo Radebe, CEO of JHI – part of Cushman & Wakefield Excellerate, notes the research reveals that: “South Africa has the most developed F&B market in Africa, with international brands continuing to make inroads into the country. International Brands are providing increased competition for domestic operators. A rising population of young people in Africa and the Middle East is attracting more international food and beverage brands. Growth in sales in the F&B sector between 2017 and 2020 of 5.6% is expected in South Africa.”

Radebe adds the tie-in between shopping and eating is stronger than ever and can be seen in the significant growth of F&B outlets in shopping centres in recent years.

Radebe adds: “This is a trend that looks set to continue. We are seeing a growing number of shopping centre owners viewing F&B as a key differentiating component for the success of their retail centres, and investing in creating more exciting F&B offerings for customers. This responds to consumers’ growing interest in food culture while also adding to the experience and entertainment people today want from their visit to a shopping centre.”

REGIONAL BREAKDOWN

AMERICAS

ASIA PACIFIC

  • Meteoric rise of food halls and restaurants is the biggest retail growth story in the US.

  • More than 24,000 new restaurants added annually over the last six years.

  • Food hall development pipeline has grown significantly: entire US food hall marketplace will have more than doubled in size in just four years.

  • In Latin America, the fast food industry has been growing thanks to the expansion of new shopping centres

  • Alternative concepts emerging to satisfy demand for healthier options combining high-quality ingredients and authentic food in a more pleasant environment than the traditional food court.

  • Concepts such as Mercado Roma in Mexico City have pioneered the way for others to follow.

  • India is forecast to have the strongest annual growth of F&B, sales between 2017-20 with an increase of 13.1%.

  • Average annual growth in China averaged 11.2% over the last four years, but this is expected to slow marginally to 10.7% a year between 2017-20.

  • Indonesia and the Philippines are both expected to see a strong acceleration in growth, with 10.1% and 9.6% forecast.

  • In Japan one major trend is the family friendly food court featuring elements such as an enhanced kids’ play area.

  • Adult-oriented urban food courts which differentiate themselves from the competition through celebrity chefs, or by bringing in local area restaurants, are also popular

EUROPE

AFRICA & THE MIDDLE EAST

  • Spain was the largest F&B market in Europe in 2016, with consumer spending on eating out ahead of the UK, Italy, Germany and France.

  • Turkey is forecast to see the strongest growth in F&B sales between 2017-20, with average annual growth of 8.8%,

  • Central & Eastern European markets Romania, Bulgaria and Poland also set for strong growth.

  • Developers creating different zones for fast casual, casual, premium casual and contemporary casual operators.

  • Continued trend of including a unique F&B anchor, whether this is a roof top restaurant or food market.

  • Landlords competing to stay ahead of the competition.

  • Saudi Arabia expected to see the strongest growth in sales in the F&B sector between 2017-20, with average annual growth of 8.8%. More modest growth of 5.6% is expected in South Africa and the UAE.

  • The rising population of young people attracting more international brands.

  • Diversification away from oil dependency towards other sectors such as tourism will support strong F&B growth over the medium to longer term.

  • South Africa has the most developed F&B market in Africa, with international brands continuing to make inroads into the country

  • Operators such as Starbucks and Krispy Kreme providing increased competition for domestic operators.

Hisense enters kitchen appliance market

Hisense enters kitchen appliance market

The heart of the home is about to get better, with new additions to the Hisense family set to enrich the South African kitchen. For the first time locally, the electronics forerunner is introducing a kitchen appliances range.

With the new cooking line-up, Hisense provides consumers with a unified brand choice which can now be found throughout the South African home. From cooking and refrigeration in the kitchen, to televisions in the living room, washing machines in the laundry room, and smartphones and tablets always within reach.

The Hisense built-in oven, gas and ceramic hobs and extractor fan will be available from retailers from August 2017, while the Hisense H701FS-ID French-Door fridge will be in stores from September 2017.

What every kitchen wants

The new Hisense kitchen range includes a state-of-the-art built-in oven, a gas and ceramic hob, along with an elegant extractor fan to complete the picture.

Styled to fit perfectly in the most modern kitchen, the Hisense built-in electric oven (HBO60201) is as serious about cooking as gastronomes are about indulging in an exquisite meal. With a full touch control LED display and aluminium stylings, the oven certainly looks the part, while the innovation inside this 70-litre twin oven does not disappoint. It boasts Hisense’s innovative Dual Cook System which allows busy chefs to prepare two dishes in the oven at the same time and at different temperatures. A concealed bottom element helps with easy cleaning, and a triple layered glass door ensures heat does not transfer to the surface.

When it comes to the Hisense ceramic and gas hobs, users do not have to settle for style over substance. Both these units are flawlessly suited for marble countertops, with the Hisense ceramic hob (HHU77CEEL) engineered with convenient touch points to control the power levels of the four cooking zones. The scratch-resistant ceramic surface makes the hob an absolute breeze to clean.

Those after the precision and instantaneousness of gas cooking will love the Hisense gas hob (HHU90GAGL), featuring five triple ring-burners and a splendid tempered glass panel surface. With auto-ignition of the burners, the hob includes flame-failure engineering that ensures safety while cooking, and stainless-steel support which is both corrosion and rust resistant.

Rounding off the cooking line-up is the Hisense extractor (HHO90TJMI). This unit can only be described as elegantly powerful, since its 550 m3/h of airflow extraction power is tempered by a low noise output of 56dB at its highest. Furthermore, touchscreen controls, energy saving LED lighting and washable aluminium filters allow for superb all-round performance.

The new Hisense kitchen range mixes elegant style with class-leading engineering, perfect for those looking for food perfection in a show-off kitchen,” says Jason Ou, Head of Product and Marketing at Hisense South Africa. “We have no doubt that these cooking appliances will perform as well as our refrigeration range has which took the No.1 position in sales value market share for six months in 2016; while between January and May 2017, our sales value ranked No.1 locally. Overall, our revenue sales growth has increased by 22.09% compared to year-on-year figures in 2016”, Ou further adds.

A fridge not to be passed by

Not to be outdone by the new kitchen range, Hisense’s refrigerators remain one of the most popular choices at retailers, being manufactured locally at the company’s factory in the Atlantis industrial region. The latest flagship unit is the H701FS-ID, a French-Door fridge that big entertainers or those with large families will immediately fall in love with. The massive 516-litre interior space is highly customisable for different sized food, and a crushed or blocked ice maker is on standby, ready for those hot summer days.

A number of renowned Hisense technologies feature inside, including Dual-Tech Cooling technology which provides the notion of separated cooling to keep your food fresh in all compartments. Cool air is essentially separate in each compartment which helps the refrigerator to keep a perfect level of humidity for delicate food, while the freezer compartment stays dry, frozen and frost-free. This technology also prevents flavour and smell integration, while all compartments maintain their pre-selected temperature perfectly.

According to Luna Nortje, Sales Executive at Hisense South Africa, the move to introduce the new cooking range to the local market was an obvious one. “It is a fact that South Africans know and love our refrigerators and televisions, so it is only logical to extend the brand into the cooking sphere. Our ovens, hobs and extractors are of world-class quality and exquisitely designed; perfect for any modern kitchen,” Nortje notes.

The recommended retail pricing is as follows:

Built-in Oven (HBO60201)

R8 999

Ceramic Hob (HHU77CEEL)

R4 499

Gas Hob (HHU90GAGL)

R3 999

Extractor (HHO90TJMI)

R3 999

French-Door Fridge (H701FS – ID)

R34 999