By Ian Fife

Retailers are rampant, developers eager, but some experts are still wary     
 
Retailers and mall developers at last week's annual conference of the SA Council of Shopping Centres in Cape Town shrugged off experts' warnings that they could be expanding too boldly and too soon. 

But many more experienced people are still nursing wounds from the booms and busts of the past 30 years, and can't escape a nagging anxiety that things may still go wrong. 

Council president and Marriott retail chief Chris Lawrence even pinpointed where the overdevelopment could be worst - in coastal towns - when he opened the conference.

And one retail researcher confided to the FM that he had withdrawn from projects when his figures showed that the surrounding households could support 10 000 m² of new trading space and the developers were building 20 000 m². 

Another researcher, Dirk Prinsloo of Urban Studies, said retailers were driving the current strong growth in new shopping space. Prinsloo agrees that some developers are building more shopping space than the shoppers in their market area can carry. 

"They are moving faster than their markets are growing," says Prinsloo. "But it's not a disaster. The number of households and their retail spending will catch up in time." 

SA has 13m m² of retail space - 0,28 m² for every person.

But with colossal developments such as Old Mutual's 200 000 m² Zonk'isizwe in Midrand being dusted off, millions more could be added in the next few years.

The large retailers Pick 'n Pay, Shoprite, Woolworths, Foschini and Edgars appear to be encouraging most new centres.  For instance, Pick 'n Pay has signed letters of intent for a 15 000 m² hypermarket at Greenstone regional centre, which is being built by AECI subsidiary Heartland on the N3 at Edenvale in Gauteng.

The supermarket chain has a store of similar size at Investec Property Group's centre, about 7 km down the N3 at Woodmead. 

The experts could be too gloomy. Investec economist Brian Kantor says shopping centre owners who rely heavily on turnover rental can expect household spending and retail consumption to grow by a real 5%/year - near 10% nominal - perhaps for the next decade. If he's right, it would justify all the current optimism.

And since spending contributes 65% to SA's GDP, this also supports a bullish outlook for the whole economy. 

International Council of Shopping Centres president Michael Kercheval described the enormous growth of shopping centres in other emerging markets, including Mexico, Brazil, China and India. Bob de Barr, development director of Britain's largest listed property developer, Land Securities, pointed out that Britain had 100m m² of retail space - 1,65 m²/person, nearly six times the amount in SA. 

And Canadian merchandising guru Anthony Stoken painted a picture of a shopping-crazed global population bent on buying 100m iPods in five years and, in the process, turning US retail giant Wal-Mart into the first US$1bn/day business in history by as early as next year.  Stoken identified broad trends that are leading changes in retail spending.

"Casualisation" in design is one. He says 109 new brands of denim jeans were launched last year. The top 10 casual shoe brands introduced 1 000 new shoe designs. This leads to the second trend, what Stoken calls "complexity nervosa", where "shoppers face overwhelming choice, which leads to decreased brand loyalty".

A third trend is the urge to be "forever young", with health spas being one of the biggest growth industries, along with related products like Viagra. A fourth trend is "time compression".  It's no wonder that by the end of the conference, most of the 800 delegates were raging bulls.