Recently published research from Business Monitor International, "South Africa Retail Report Q3 2013", is now available at Fast Market Research
Boston, MA -- (SBWIRE) -- 09/09/2013 -- The South African Retail Report examines the long-term potential of the local consumer market, but flags short-term concerns about the impact on South Africa's economic outlook of weakening in the already subdued domestic housing market.
The report examines how best to maximise returns in the South African retail market while minimising investment risk, and also explores the impact of serious headwinds from the global economy and potentially high investor risk aversion on the South African consumer and on the ability of producers and exporters to realise returns in the short term.
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The report also analyses the growth and risk management strategies being employed by the leading players in the South African retail sector, as they seek to maximise the growth opportunities offered by the local market.
South African per capita consumer spending is forecast to increase by 60.9% to 2017, compared with a regional growth average of 53.5%. The country comes first (out of seven) in BMI's Middle East and Africa Retail Risk/Reward Ratings, although it underperforms for Risk.
Among all retail categories, mass grocery retail (MGR) will be one of the outperformers between 2013 and 2017, with sales forecast to rise 45.1%, from US$27.98bn to US$40.60bn by the end of the forecast period. At that point, organised retail will account for almost 64% of total grocery sales, higher than all the BRIC economies of Brazil, Russia, India and China. In the competitive arena, BMI sees upside potential in the fact that South Africa's MGR sector is comfortably Africa's largest by value, while Walmart's entry and commitment to focus mostly on food retail in South Africa highlights the sort of opportunities still on offer.
Over the last quarter, BMI has revised the following forecasts/views:
- BMI expects the South African economy to post sluggish growth over the medium term, forecasting that real GDP will expand by 2.3% in 2013 and 3.3% in 2014.
- The consumer sector has been a key driver of the recovery seen since the global financial crisis, but it is now losing steam. We forecast that private consumption will grow by 2.7% in 2013, which would mark a slowdown from the 3.0-5.0% rates recorded over 2010-2012.
- Q412 data on retail sales and credit extended to private households suggested that the consumer remained in decent shape in spite of indebtedness. Retail sales grew by 1.0% year-on-year (y-o-y) in October 2012, clearly anaemic but still respectable considering the extent of economic disruption that occurred that month due to industrial unrest. Meanwhile, credit extended to private households grew by a robust 9.3% y-o-y. However, retail sales growth eased to 1.9% in April 2013 (the latest month for which data were available at time of writing) as slower economic growth and rising unemployment curbed consumer spending.
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