With the onslaught facing South African consumers in the form of ever increasing transport and fuel costs, it’s going to be a challenging year not only for the shoppers but for shopping centres as well.

Mark Souris, Managing Director at Periscopic, a retail property management company says, “Consumers are now paying an all-time record price for petrol. Add to that the financial burden of the toll roads and it’s clear that shoppers will be looking to cut costs. It’s likely that a consumer will ask if a trip is really necessary before they take the car out the garage.”

Although Souris makes no reference to online shopping, it is abundantly clear to sector commentators that centres and their management teams need to carefully consider the range of impacts and hence solutions that this is having on manufacturers, consumers and retailers alike.

The impact will be that shoppers are likely to be more selective about where they buy. Whereas previously, consumers may not have minded driving extra kilometres to purchase their groceries, if it meant they’d be facing a wider range and more convenience, this is no longer the case. Moreover, the frequency with which they shop may change too, with shoppers opting to make one large buying excursion per month rather than stepping into a store when they run out of a certain product. This bodes well for smaller community centres, whose convenient location will undoubtedly attract shoppers from the neighbouring surrounds.

“Another key trend gathering momentum is the changing ratio of national and smaller tenants. There are several reasons for this: not only are finance houses requiring that developers take on more national tenants because of the reduced risk associated with a national retailer, but developers themselves are struggling to find ‘mom and pop’ operations willing to lease space,” Souris adds.

Meanwhile, although there have been reports in the media that retail – and the local economy – is picking up, Souris remains cautious. He notes that there have been other news stories pointing to the possibility that some major retailers may need a bail out. It’s inevitable that the patrons of these stores will turn to other retailers for their needs, specifically Shoprite Checkers and Woolworths. The latter is readying for growth, it would appear, and according to Souris is seeking to open 10 new supermarket-style stores that cater for trolley shoppers. This is good news for shopping centres, who stand to gain significantly by hosting such a tenant.

Also interesting, says Souris, is the growth of rural centres. “Rural centres among our clients, have grown fivefold in the last year,” he informs. The majority of these are community centres measure between 10 000 and30 000m². A number of neighbourhood centres, measuring between 3 000m² and 10 000m², are also being built. This is significant for the people inhabiting such areas as they will no longer have to travel considerable distances simply to purchase groceries. Souris believes this is likely to impact on some retailers, who now have exciting new opportunities open to them. He advises that they need to make haste to take advantage of these opportunities.

Although shopping centres may find themselves facing challenges during the year ahead, Souris says that, by thinking cleverly, they can overcome these. For example, careful thought should be given to marketing initiatives: “If one of your tenants is hosting a weekend special, you can be sure that the centre will attract more shoppers during this period – unless they have to pay for parking, in which case they will choose to go to a centre where parking is free.

Consider partnering with retailers; in this case, you could offer one hour’s free parking to shoppers taking advantage of the weekend special,” he says. “By coming up with solutions like this, shopping centres can ensure they will remain relatively unaffected by the cost cutting measures consumers are likely to implement during the coming year.”