Retail & business developments under the Covid-19 climate in South Africa
South Africa’s business sector is a hive of activity with various developments taking place.
While the Covid-19 crisis has hampered serious growth prospects, business activity is being recorded. The retail sector in particular has continued to provide much-needed goods and services to consumers.
You can become part of a vibrant retail sector courtesy of Guzzle. What are the key things in the retail sector worth knowing?
Leasing
The Competition Commission embarked on a four-year investigation into the contentious exclusive leasing in shopping centres. The findings recommended that exclusive leasing be stopped in non-urban areas with no renewal or new leases being signed.
It is expected that exclusive lease agreements in urban and rural areas will be phased out in the next five years.
Currently, some exclusive lease agreements run between 20 and 40 years which blocks entry access for many retailers.
Lockdown
The retail sector is still dealing with the impact of the extended level 3 lockdown. Indoor and outdoor business establishments now have to close by 8 pm just an hour before the current 9 pm curfew.
Occupational health and safety directions put in place means that many retail stores have cut down on the number of staff and consumers they allow in at a particular time.
The extended onsite and offsite ban on alcohol consumption has stopped many consumers from visiting their favourite restaurants which have negatively impacted profit margins in restaurants, liquor stores and retail stores.
Retail occupancy
South Africa’s retail sector especially shopping malls and centres are feeling the pinch of the Covid-19 health crisis.
An increasing number of retail stores have closed shop with many battling to settle rentals. This is attributed to the loss of trading hours which has negatively impacted the cost of occupancy which is determined by gross rental rates versus revenue generated from sales.
Vehicle servicing
Motor vehicle servicing agreements in South Africa have been a huge source of acrimony.
Vehicle owners are bound to service plans which forces them to only use the vehicle manufacturers service centres, failure to which they run the risk of losing their warranty.
The new guidelines by the Competition Commission mean all this will be history from 1st July 2021.
Dischem drive through vaccine
Dis-Chem has continued to be a key player in efforts to combat Covid-19.
This leading retailer has announced its preparedness to offer vaccinations and testing at a drive-through
facility.
South African authorities are currently making progress in securing vaccines which are expected to begin arriving at the end of January.
Investment in local manufacturers
South African retailers are set to increase investment in local clothing manufacturers.
Retailers including Woolworth have made a commitment to increase investment in local clothing and garments manufacturers. Retailers signed an industry plan which includes a target to source 65% of their goods from local manufactures in the next decade.
Reports indicate that only 20% of the cotton produced in South Africa is used locally with about 80% being exported.
The list of developments above shows that there is life in the world of business during Covid- 19. Retailers can count on Guzzle to maximise their consumer reach and sales.
Guzzle allows retailers to reach a broad clientele and caters for diverse demographics through digital catalogues where consumers can search for products, compare prices and make a purchasing decision.
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