Retail numbers suggest more woe in store for SA economy
Painfully slow growth in consumer spending forces brutal cutbacks at some of SA's big retail names
I am exceptionally concerned about the SA economy, and specifically the retail sector. Over just a few recent days, Edcon announced the closure of its emporium in Rosebank, Johannesburg; Massmart (https://www.sharenet.co.za/v3/quickshare.php?scode=MSM) said it would shut down Dion Wired and some Masscash outlets; and Statistics SA released retail sales numbers for November 2019 (which incorporated the “Black Friday” period) that showed an uninspiring 2.6% increase.
Consumer spending is suffering and the outlook is dismal. Sharing my fears is Syd Vianello, an independent retail analyst, who expects Massmart’s new management to continue interrogating every store’s profitability:
“There is just one question to be answered – does this marginal store have a reasonable prospect of being turned around, or not?” Dion Wired operated predominantly in a highly competitive, cutthroat, low margin, commodity type business, with high shopping mall rentals. “So its closure was an event just waiting to happen,” says Vianello...