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Contents.

  1. SA Retail Industry Outlook & Results
  2. 4 Key Trends That WIll Continue to Shape Convenience Retail in 2019
  3. Retail Tissue in South Africa, ad to Retail-Fmcg
  4. PLMA- Chicago
  5. Global Menstrual Cups Market Research Report information
  6. The Retail Industry in South Africa
  7. South Africa's retail sales
  8. Government to step in on price of bottled water in Cape Town
  9. Pick n Pay, Shoprite & Checkers are set for big changes in 2018

          

SA retail industry outlook and results

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4 Key Trends That WIll Continue to Shape Convenience Retail in 2019

Source Joe Byle, Fresh Stop


As convenience retail continues to grow as an industry sector, retailers must remain focused on the most significant trends that will see their businesses flourish, and in so doing, strengthen their standing in the ever-competitive retail environment.

Convenience-store retail industry leaders came together to share expertise and at the most recent NACS Insight Convenience Summit 2018, which took place in Las Vegas, USA.

Each year, one of the most interesting discussions is about how the latest trends will shape the industry going forward. As a Board Member of NACS’ Inaugural Global Board, South Africa is formally represented in this international organisation.

The following four trends will continue to strategically shape the future of convenience retail both internationally and here in South Africa:

1. Food service categories

As convenience stores continue to focus on and build their food service categories to compete with national QSR brands, customers are not the only ones taking note. Fuel retail stores used to be looked upon as the poor brother of the retail industry but this has changed. Even High Street brands are now paying attention to forecourt convenience stores by exploring and trying out new formats to get a slice of the pie.

Convenience stores have been lifting the game and now offer better value and many more food options that rival the high street chains in quality and consistency. We are gaining momentum and starting to take market share away from traditional retail.

Food service lines, and the variety thereof, are a crucial part of growing a successful c-store retail business. The industry internationally is bragging about an approximate 20% participation rate, whereas the leaders in the c-store industry in South Africa can achieve around 30% in stores with a food service offering, which far outpaces the industry norm.

Where c-stores have support of national supermarket retail brands, they can compete through price on grocery categories. On top of that, the innovation of QSR brands that offer the likes of deep-fried chicken, hamburgers and flame-grilled chicken, make the convenience store much more appealing to new trends that customers need and demand. Not forgetting, customers’ on-going demand for healthier food options and a good quality Barista coffee offer.




2. Frictionless shopping

Frictionless shopping is all about providing customers with a personalised, enhanced, simplified and smooth shopping experience. For retailers to be successful, they must embrace technology and data throughout the process, from product innovation to the in-store consumer experience.

The most notable example of frictionless shopping is Amazon Go, the first completely checkout-free shop. Customers enter the store using their Amazon Go app, they fill up their shopping bag and simply leave the store when they’ve finished selecting items. The store uses cameras and sensors to know what has been taken off the shelf, so it can be charged to the customer’s account. No cashiers, no long lines, no paper receipts.

This form of shopping will take some time to come to South Africa but retailers need to start incorporating technologies and processes to provide customers with frictionless shopping options.

I believe that c-store customers will soon be able to place an order at a food service counter self-ordering kiosk and in so doing, avoid long lines or confusion with orders. Once they receive a number they’ll have the freedom to continue shopping in-store and add to their basket. Frictionless shopping is a combination of simplicity of transaction, the customer experience and speed of delivery.


3. Evolve with change

The evolution of motor vehicles and the possibility that petrol might be deregulated are base changes that would impact the viability of convenience stores dramatically. With cars being able to go further with less fuel, the rise of electric vehicle charging stations, and recent statistics that show customers are stopping at c-stores more often, retailers must come to terms with the fact that customers will only frequent those forecourt stores where they get the offer that suits them. Fuel stations that don’t evolve will die.

In essence, the forecourt of the future will be revolutionised. The recharging/fuel stations will become the back court with the store/café becoming front and centre, so the retail offer has gained importance. For example, a regular c-store coffee customer will rarely think of buying fuel anywhere else but where she buys her coffee. Integrating mobile technologies such as apps to attract customers in-store, or offering them their favourite products on promotion via touchless payment is gaining traction.

4. The customer experience

The customer experience as a key trend sounds outdated but in order to remain competitive in an evolving retail environment, the future of c-stores relies on the customer experience and, at the end of the day, the in-store experience that includes ambience and vibe (music and infotainment) will help drive repeat business.

The customer experience revolves around personality recognition and consistency. When you bring personality and training together, you create an experience where the customer feels recognised whilst at the same time being assured of every aspect of your business. There is much value to be placed on having the best Wi-Fi, the cleanest toilets, and working power points that works in unison with the tastiest food and the fact that the Barista knows exactly how you take your coffee.

Based on research from NACS and the Coca-Cola Retailing Research Council, customers define convenience as a comfortable and frustration-free shopping experience; and going into 2019, convenience retailers would do well to incorporate these four trends into the decisions they make today, as the c-store of today will not be the same c-store in 20 years’ time – it will evolve.



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Retail Tissue in South Africa, ad to Retail-Fmcg

 

Many South African consumers are seeking value-for-money offerings in order to protect themselves against inflationary pressure. Consumers who face these challenges the most tend to fall into the lower middle and lower income brackets.

In paper towels, consumers are not necessarily loyal to leading brands; instead they are willing to trade down to value alternatives if they deem the price to be relevant. Supermarkets, for example, are taking stock of this as they continually place their private label lines alongside leading brands.

Boxed facial tissues continue to remain popular amongst consumers with assortments of products such as gender-specific, scented and those aimed at children. Boxed facial tissues are not the only format; tissues packaged in flexible plastic are available in private label ranges from Pick ‘n Pay and leading brand Twinsaver.

Twinsaver Group proved to be the most prominent player within retail tissue as it was prevalent in all categories, managing the majority of shares in boxed facial tissues and toilet paper. Pick ‘n Pay Retailers also managed to hold a respectable value share in paper towels and napkins.

There is an increased presence of no-thrills packaging for economy priced toilet paper, especially from private label offerings. The packaging displays minimal information and is of relatively low quality.

However, the supermarket retail business in the country remains the leader of the continent.

 

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PLMA- Chicago

 

What do you see when you look into the future? Do you see opportunities and breakthroughs or problems and obstacles? Store brands is based on optimism. It is all about taking advantage of the future and growing. That is what you will see for yourself if you exhibit or attend PLMA’s 2018 Private Label Trade Show.

You can become part of this exciting phenomenon. Private label market share has reached nearly 25% of unit sales in the U.S. and is expanding faster than national brands. Retailers coast-to-coast have committed themselves to an aggressive store brands strategy while specialty chains are using their own brands to create shopper loyalty unheard of only a few years ago.

Buyers from every channel will be at the 2018 show. Today’s supermarkets, supercentres, drug chains, mass merchandisers, convenience stores, online retailers, importers, exporters, wholesalers, discounters, and even military exchanges, will all on hand, looking for new products and identifying new suppliers.

For more than 30 years, PLMA’s annual trade show has been the industry event of the year, where retailers and wholesalers source for their private label programs. More than 1,500 companies from 40 countries will be exhibiting their products, including 25 international pavilions. Exhibitors range from small and medium-size companies to well-known national brand makers who also supply store brands.

No show offers participants a greater opportunity to meet. PLMA’s online Show Preview helps buyers and sellers to identify interesting products in advance of the show and set up one-on-one meetings. PLMA’s Idea Supermarket displays private label programs of retailers around the world to benchmark what the industry is doing. And all of this is concentrated into two days of show floor time to maximize exhibitor and visitor time.

 

 

PLMA’s 2018 Private Label Trade Show will be held at the Rosemont Convention Center, only 10 minutes from Chicago’s O’Hare International Airport. Conveniently located within walking distance or short shuttle bus rides from major hotels, the convention center provides exhibitors with an easy-to-reach, efficient venue for trade shows.

Trade Show Schedule:

Sunday, November 11


12:00pm - 7:00pm

Registration Open

Rosemont Convention Center


2:00pm - 4:00pm

Sunday Seminar Program

Hyatt Rosemont Ballroom


 

 

 

Monday, November 12


7:30am - 6:00pm

Registration Open

Rosemont Convention Center


8:00am - 9:00am

Keynote Breakfast

Hyatt Grand Ballroom

 

Fred Morganthall
President
Harris Teeter (1997-2014)

 


9:00am - 6:00pm

Trade Show Floor Open

Rosemont Convention Center


9:00am - 6:00pm

Idea Supermarket®

Rosemont Convention Center


 

 

 

Tuesday, November 13

 

 


7:30am - 4:00pm

Registration Open

Rosemont Convention Center


8:00am - 9:00am

Retail Trends Breakfast

Hyatt Grand Ballroom

 

The Next Big Thing? Online-2-Offline
Neil Stern
Senior Partner
McMillanDoolittle

 


9:00am - 4:00pm

Trade Show Floor Open

Rosemont Convention Center


9:00am - 3:00pm

Idea Supermarket®

Rosemont Convention Center


If you would like to exhibit at PLMA’s 2018 Private Label Trade Show, please contact exhibit@plma.com or telephone (212) 972-3131.

If you would like to attend the Show as a visitor, go to www.plmaregistration.com

Private Label Manufacturers Association
630 Third Avenue
New York, NY 10017
Telephone: (212) 972-3131
Fax: (212) 983-1382

 

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Global Menstrual Cups Market Research Report information: By Product (Reusable Menstrual Cups and Disposable Menstrual Cups), by Type (Round and Hollow), and by Distribution Channel (Online Stores and Retail Outlets) – Global Forecast Till 2023

Market Summary

The global menstrual cups market is anticipated to reach USD 1514.01 million by 2023, as per a new detailed report by Market Research Future (MRFR). It is expected to exhibit a 3.50% CAGR during the assessment period (2018-2023). The rise in the women populace coupled with high costs of sanitary pads and tampons are expected to drive market growth over the forecast period. Demand for eco-friendly feminine hygiene products can bode well for the market.

Menstrual cups are an eco-friendly alternative to tampons or sanitary napkins derived from medical-grade silicone. The rise of the women workforce coupled with the female gender representing nearly half of the global population is factors expected to spur the menstrual cups market growth. In addition, the products can prevent leakage of menstrual fluids with no reported adverse effects.

Report Overview

This report allows the user to gain a deeper understanding of the ongoing events and trends in the global market for menstrual cups. By correlating the historical data with key market dynamics, our analysts were able to make highly accurate projections in the report. MRFR’s report includes a thorough segmental analysis of the global menstrual cups market segmented by product type, test type, end-user, and region with astute insights. This report has been prepared to assist industry participants in making informed decisions on growth strategies and operation management. Users will also come across drivers, trends, opportunities, and restraints which are likely to influence the growth of the market during the assessment period.

Players Covered

Me Luna, LadyCup, Ruby Life Ltd., Lunette, Irisana S.A., The Keeper, Inc., Vcup, Anigan, FemCap, Inc., and Diva International Inc., are prominent players in the menstrual cups market. These companies have turned to online channels and digital marketing to create their niche. Online channels offer privacy to users with consumers choosing to buy sanitary products at their own discretion.

Segment Overview

By product, the menstrual cups market has been segmented into reusable and disposable menstrual cups. Reusable cups will dominate the market by accounting for a large market share by 2023. This can be attributed owing to reusability cycle of these cups ranging from 1 to 5 years depending on the brand. By type, the market is segmented into hollow, pointy, flat, and round. The round segment accounted for 43% market share due to the flexibility in the design of these products.

By distribution channel, the market is segmented into online stores, retail outlets, and others. The online store channel segment accounted for 62% market share owing to penetration of e-commerce stores and changing buying patterns of consumers.

The segments and sub-segments covered in the report are analyzed under four major regions –Americas, Europe, Asia Pacific (APAC), and the Middle East and Africa (MEA), with respective country-level market sizing. For the scope of research, the standard definition of the product/ service “menstrual cups” is included in the report. The report discusses and interprets the current and future opportunities of the industry by delivering an unbiased growth assessment.

The report offers comprehensive profiles on these market players and assesses their current standing in the menstrual cups market. Company history coupled with annual turnover, segmental share, SWOT analysis, growth strategies, new product launches, M&A activities, and latest R&D initiatives are outlined in the report.

Research Methodology

Market Research Future (MRFR) uses a combination of primary and secondary research to compile market reports. Primary data is accumulated from interviewing industry stalwarts, and secondary research is collated by studying white papers and annual reports of leading players. Our analysts use top-down and bottom-up approaches to validate the findings of the report. The report comprises news, current trends, and future prospects related to the market, all of which can provide a thorough understanding of the market to clients. Industry leaders can make accurate business decisions based on our insights.

Analysis Period

  • Base Year - 2017

  • Projection Period - From 2018 to 2023

  • Market Denomination - USD Million

  • Conversion Rate - Considered as per the respective financial years

For the scope of research, the report offers a comprehensive analysis of the global menstrual cups market.

Product

  • Reusable

  • Disposable

Type

  • Hollow

  • Flat

  • Round

  • Pointy

Distribution Channel

  • Online Stores

  • Retail Outlets

  • Others

Region

  • Americas; North America and South America

  • Europe; Western Europe and Eastern Europe

  • Asia Pacific (APAC); Japan, China, India, Australia, Republic of Korea, and Rest of Asia Pacific

  • Middle East & Africa (MEA); The Middle East and Africa

Intended Audience

  • Government Research Institutes

  • Research and Development (R&D) Companies

  • Medical Devices Companies

  • Academic Institutes and Universities

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The Retail Industry in South Africa

 

The retail industry has grown over the past years, supported by an increase in both the supply of retail space and the number of shopping centres in the country. The industry grew by an annual average of 3 percent in the past eight years. The country has seen a boom in shopping centre development and townships have also benefited from this. Retail trade sales have been increasing over the years. An average annual increase of 29 percent in online retail sales, total retail trade sales are expected to further escalate. Growth of the industry is largely influenced by economic conditions that consumers find themselves in. Amongst others, these include the level of the interest rate, inflation and economic growth.

A stable economic environment allows consumers to spend more, thereby increasing the value of retail trade sales. At 26.5 percent, Gauteng contributes the largest share of gross value added by the retail industry. The economic contribution made by the industry is of great value to the economy and the public as it offers more employment opportunities, especially to the youth. Though the industry has various challenges, opportunities do exist. Some of the challenges experienced by retailers include increased operational costs and skills shortage. However, the relatively developed infrastructure and institutions in the country, make multinational companies view the country as a hub where they can establish and expand business to the rest of the Sub-Saharan African region.

 

South Africa has seen the retail trade industry grow from strength to strength over the recent years. The industry mainly comprises of individuals and companies engaged in the selling of finished products to end user consumers. An increasingly large number of businesses have entered this industry; both formal and informal retail traders have experienced growth over the years.

With the South African economy evolving to one that is consumer driven, as mining and manufacturing decline, industry expansion falls on the hands of retailers. The decline in manufacturing also makes the country to be globally uncompetitive as it relies more on imports. The country continues to develop new malls and shopping centres. This increasingly rapid establishment has in the recent years seen not only cities expanding their retail area but also some townships have had malls and shopping centres being developed.

South Africa‟s retail industry has evolved over the years. Improved and modern infrastructure in the country has allowed for more rigorous economic activity. The retail industry has benefited through efficient distribution of goods to urban centres, townships and rural areas. Shopping centre development has shifted from being concentrated in inner-cities to suburbs and townships. Rapid construction of high-density housing in the surrounds of major urban areas has led to the demand for and increased developments of retail centres in these residential areas. The country’s retail outlets offer a full variety of formats that are similar to those in the United States (US). These retail outlets range from cafés, general dealers, specialty stores, exclusive boutiques, chain stores, department stores, cash and carry wholesale-retail outlets and the co-operative stores which serve most rural areas.

 

South African retail companies compare well with other retailers globally. Major industry players in the country include Edcon Pty (Ltd), Pick n Pay Holdings Ltd, Shoprite Holdings Ltd, Spar Group Ltd, Woolworths Holdings Ltd and Massmart Holdings Ltd. In the 2012 Global Powers of Retailing report5, the country’s top five retailers were ranked in the global top 250 retailers. Shoprite was ranked 92nd in the retail sales rank, Massmart (126th), Pick n Pay ranked (133rd), Spar (179th) and Woolworths (222nd). In 2009, the retail industry’s average profit margin was 3.9 percent. Retailers in the Textiles, clothing, footwear and leather goods had the highest profit margin at 10.8 percent. This section discusses these six major industry players. There are other retailers in the clothing and fashion retail chains that have a noticeable presence in the country but will not be discussed further because they respectively contribute smaller shares in the industry. These include Mr Price, Truworth‟s International and the Foschini group.

Edcon Pty (LTD) is the largest clothing, footwear and textiles (CFT) retailing group in South Africa. Edcon is estimated to have 31 percent market share of the CFT retailing group. 6 The company has about 1,228 stores operating in South Africa, Botswana, Namibia, Swaziland and Lesotho. Through its recent acquisitions, Edcon retail business has added top stationery and houseware brands as well as general merchandise to its CFT portfolio. The company also provides credit facilities and financial service products to the Group’s over four million card holders.

Edcon ‟s retail business is structured under two divisions; the Department stores division, which includes Edgars, CNA, Boardmans, Prato, Red square and Temptations, which serve

middle and upper income customers. The second division is the Discount Division, which includes Jet, Jet Mart, Jet shoes, Legit and Blacksnow, serving lower to middle income customers.

Pick n Pay is one of the largest Mass Grocery Retail (MGR) companies in Africa with a market share of 30 percent in South Africa. The group operates 794 outlets made up of hypermarkets, supermarkets and family stores.

 

The Shoprite group of companies is also one of Africa’s largest food retailers, with a market share of 30 percent in MGR. The company operates 1,303 corporate and 427 franchise outlets in 16 countries across Africa. It employs more than 95,000 people, of which approximately 11,000 are outside the country.8 Shoprite caters mainly to the middle to lower-end of the consumer market.

Some of its store formats and retail brands include Shoprite supermarkets, Checkers supermarkets, Usave stores, Medirite pharmacy, House & Home and the OK Franchise division.

 

The Spar Group is the third largest MGR by market share, with a share of approximately 26 percent. It operates six distribution centres, supplies goods and services to approximately 800 stores in the country.9 Stores that are under the Spar group include;

Build It, Pharmacy at Spar, Tops, Kwikspar and Superspar. The group operates in three countries.

Woolworths is the fourth largest MGR, with 11 percent market share. This company has approximately 23,304 employees. Woolworths owns 295 stores and has 145 franchised stores. It offers its own product brand of clothing, food, home and beauty. It operates

in 18 countries, with store formats that include full line stores which stock a complete range of Woolworths‟ products. The Woolworths food stores only sell Woolworths foods.

The Massmart group consists of nine wholesale & retail chains with 265 stores in South Africa and 13 in other countries. It has about 1 percent market share of the MGR and employs over 30,000 staff members.

 

Economic activity within the retail industry has flourished over the years. This can be seen by the increased developments of formal retail shopping centres. Gauteng in particular, has seen rapid growth of shopping centre development. The province makes up 45 percent of shopping centres of the country. An increase in shopping centres leads to the employment of more people, thereby addressing the country’s problem of high unemployment rate. About 27 percent of the youth are employed by the wholesale & retail sub-sector in the province. Gauteng contributes the largest share (26.5 percent) to the country’s retail industry. The province is also home to four out of eight super regional centres in the country, these include Sandton City, Menlyn shopping centre, Eastgate shopping centre and the Westgate shopping centre.

The key players in the industry include major retailers which are Edcon Pty (Ltd), Pick n Pay Holdings Ltd, Shoprite Holdings Ltd, Spar Group Ltd, Woolworths Holdings Ltd and Massmart Holdings Ltd. An indication that these retailers are globally competitive is that, most of them were in the rankings of the global top 250 retailers. Although the retail industry in South Africa does not have a formal regulatory board, retailers are members of certain associations. These are the Consumer Goods Council of South Africa, the South African Retail Council, the Franchise Association of South Africa and the Council of Shopping Centres South Africa.

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South African Retail Sales

Source: JSE

South Africa's retail sales increased 8.2 percent year-on-year in November of 2017, following an upwardly revised 3.5 percent rise in the previous month and well above market expectations of 3.1 percent. It was the steepest gain in retail trade since June of 2012. Sales rose for general dealers (6.0 percent compared to a flat reading in October) and hardware, paint and glass (1.4 percent compared to a flat reading). In addition, sales advanced at a faster pace for: textiles, clothing, footwear and leather goods (12.4 percent compared to 5.6 percent); all other retailers (20.8 percent compared to 15.3 percent) and furniture and household equipment (14.1 percent compared to 3.4 percent). On the other hand, sales went up softer for food, beverages and tobacco in specialized stores (0.5 percent compared to 2.7 percent) and pharmaceuticals goods and cosmetics (4.6 percent compared to 5.3 percent). On a monthly basis, retail trade went up 4.0 percent, after a 0.1 percent drop in October. Retail Sales YoY in South Africa averaged 4.58 percent from 2003 until 2017, reaching an all-time high of 15.50 percent in September of 2006 and a record low of -6.40 percent in April of 2009.

 

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Government to step in on price of bottled water in Cape Town
Source: Supermarket & Retailer

The Portfolio Committee on Trade and Industry says it plans to write to the minister of trade and industry and the National Consumer Commissioner (NCC) to ask them to rein in unscrupulous traders who have increased the price of bottled water to benefit from the ongoing water crisis in Cape Town.

“In principle we are asking for intervention so that something can be done to make sure the regular price of bottled water is not increased without any regard to the pockets of consumers especially the most vulnerable,” said ANC member, Adrian Williams.

All members agreed that something needed to be done while Ghalieb Cachalia from the Democratic Alliance stated that “measures should be developed to prevent the poor bearing the brunt of such unfair trading”.

The chairperson of the committee, Joanmariae Fubbs having noted the consensus of all committee members present said that given the water situation in Cape Town,“the current increase in the price of bottled water being charged by some unscrupulous entrepreneurs amounts to exploitation of the poor and vulnerable and does not reflect the spirit of the Constitution”.

She said the minister and the NCC must apply their minds “expeditiously to make sure unfair business practices do not prevail” in Cape Town.

No hike in Cape bottled water prices despite growing shortage

Research published by consumer price watchdog, Retail Price Watch, on Friday (26 January) found that major retail chains in the region are largely sticking to 2017 prices for 5l bottled water.

However the net effect of the drought is that there has been a rush on bottled water and many stores have found themselves temporarily out of stock, said  Retail Price Watch’s Viccy Baker.

“Under normal circumstances demand pressure would have increased the price of the larger sizes, but instead stores have been offering specials which have cleared their shelves, even if only for a short time,” she said.

“Retailers are to be commended for not capitalising on the shortage, although it is very likely that consumers who are already very angry about the way the water crisis in the Western Cape has been handled, would not tolerate large price hikes,” Baker said.

5l still water

Average January 2017 price

Average January 2018 price

Aquartz

R23.22

R21.70

Aquelle

R18.25

R19.41

Nestle Pure Life

R22.49

R20.36

Pick n Pay

R17.99

R17.99

Thirsti

R19.81

R18.99

Tsitsikamma

R18.37

R18.99

Woolworths

R22.47

R22.99

Average price

R20.37

R20.06

 

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Pick n Pay, Shoprite, and Checkers are set for big changes in 2018 – here are 7 things to look out for

Source: Maryla Masojada, Trade Intelligence

As 2018 begins, we find ourselves in a time where extreme economic pressure and the technological developments are significantly influencing how consumers and shoppers behave, and shifting the demands made on those who supply or service them. We are racing towards a game-changing revolution in how products are made and sold, where and by whom.

These influencers, and the impact of South Africa’s complex political and macro-economic environment, present a unique and fascinating picture. What is driving consumer goods retail strategy is twofold – behaviours driven by consumer demand (covered in this article) and those shaped by organisational ‘back-end’ profitability requirements of the retailers themselves.

On the consumer-demand front, there are four key drivers at play that are shaping consumer goods retail strategy and behaviours: value as a necessity, time is a luxury vs experience as a drawcard, living healthy vs nutritional deprivation, and ethical living.

Value as a necessity

The impact of acute and growing economic pressure has in turn increased the pressure on retailers to bring the best-quality product at the best price to the complete spectrum of customers.

Trend 1: Price warfare: Having the cheapest price is increasingly the single determinant in the choice of shopping destination, and retailers are responding with innovative mechanisms in the race to demonstrate tangible value to shoppers – from loyalty points to cashbacks, multi-buys and BOGOFs.

The importance of the welfare wallet cannot be underestimated, and certain retailers depend heavily on the flow of social grant monies into the hands of their recipients. The acceleration of private label up the priority spectrum, from Shoprite to UMS, Pick n Pay to Jumbo, both as margin generator and competitor differentiator, is a clear expression of the hunt for margin and differentiation in a context of cash-strapped shoppers.

Time is a luxury vs experience as a drawcard

The demand for convenience by time-poor consumers continues unabated. The counter-balance to this? Consumers and shoppers will still spend time to have an experience instore.

Trend 2: The rise and rise of convenience retailing: The rise of the small store has significant implications for retail business models, supply chains and brand or product innovations. It is how these multiple drop-off points are cost-effectively served that will influence who wins.

How will large stores compete? ‘Everything under one roof’ will extend even further, with ‘retailer as lifestyle partner’ positioning and shopper experience being used as the drawcards. On the e-tailing front, South African retailers are on the road, with varying degrees of success. The challenge of the last-mile remains the inhibitor, although interesting innovation is underway, from township bicycle deliveries to click-and-collect solutions.

Trend 3: Increased focus on optimising the shopper experience: Expect further expansion of lifestyle-focused formats and products with next-generation stores, from Checkers Ballito to Pick n Pay Constantia emphasising in-store experience to attract shoppers and drive sales of high-margin lines. As Doug Stephens @RetailProphet says, ‘the line between retail and hospitality will soon barely be visible. Experiences won’t sell products. Experiences will be the product.’

Digital connectivity, augmented reality, virtual reality, artificial intelligence and blockchain technology are rapidly transforming how retailers and manufacturers engage with shoppers. Just the advent of scannable barcodes in the store or at home will transform how and from whom shoppers buy, held up only by how fast supply chain infrastructure can cost-effectively respond. 

#BizTrends2018: What is shaping grocery retail in South Africa - Part 1

©Gui Yongnian via 123RF 

Living healthy vs nutritional deprivation

Healthy living is taking the developed world by storm. With ageing populations, and a global and local increase in consciousness around wellness of body, mind and soul, consumers have growing expectations of health and wellness products and services. The retail response ranges from increasing allocation of shelf space to healthy products to the continued expansion into pharmacy and wellness clinics.

At the other end of the continuum is nutritional deprivation – where, either through lack of awareness or lack of access to healthy food, consumers are nutritionally deprived. Although it is important to remember, no one knows better how expensive it is to be ill, than people who cannot afford to be ill.

Trend 4: Retailer as ‘lifestyle partner’: In the ongoing race to attract and retain the cherry-picking shopper, retailers will continue to expand their lifestyle services whether in healthcare, nutrition, beauty advisory services, parenting support or in hospitality and banking. The latter further facilitated by the explosion of cyber cash, mobile payment technology and digital payment apps – from Woolworths to the informal traders of Durban’s Warwick Triangle.

Ethical living 

The world’s population consumed 1.6 planets’ worth of resources in 2015, a number reportedly set to increase. Clearly something has to give. Increased awareness of what ethical living means shows up across the retail landscape. The counter-trend of growing consumerism still prevails, particularly in less-developed markets; however, the shift to more ethical consumerism is accelerating.

Trend 5: Sustainability as a competitive imperative: There are those who ‘get it’ and those who don’t. Previously the domain of the likes of Spar, Pick n Pay and Walmart Massmart, sustainability has become more pervasive. Shoprite, who once stated that ‘we do sustainability when it is profitable’, has now clearly articulated ‘focus on environmental impact’ as one of their eight key strategic focus areas – a clear expression of the recognition of the fact that doing ‘sustainability’ well (and the scope of what that covers) can see significant cost saving and margin-generating benefits.

Trend 6: Community retailing as competitive advantage: Building and investing in the community you serve ensures a healthy, financially viable customer into the future. Again, there are those who get it and those who don’t. South African retailers and wholesalers are increasingly prolific in this area, and going forward, community retailing will increasingly underpin retailer and supplier shopper marketing strategy and activities.

Trend 7: Ethical trading: With the recent Steinhoff debacle, corporate governance and controls will tighten into 2018. The positive here is the improvement of accountability, while the negative is the restrictions this place on corporates who need to be light on their feet to effectively compete with independents.

In conclusion, when defining strategy in response to the market forces at play, grocery retailers and manufacturers will look at these seven consumer-driven trends in conjunction with the seven ‘back-end’ drivers of profitability, which will be detailed in part 2 of the Ti Retail Trends 2018 report.

The retail winners of the future will be those who adapt fast to escalating change, effectively balancing the consumer-driven demands and operational profitability drivers.

 

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