Edcon has effectively exited the south African retailing landscape, after operating in the market for over nine decades. The move followed 45-day trade restrictions imposed by the government from 26 March 2020 in response to the pandemic, which translated into up to ZAR2 billion in financial loss, a condition that exacerbated an already precarious financial condition that led to Retailability Group acquiring Edcon's Legit brand in apparel and footwear in 2018.
The number of outlets in department stores continued to post a steady decline in 2021, as operators took a cautious approach to investments while closing underperforming outlets. From a revenue perspective, recovery was affected by slower footfall in shopping centres during new waves of infections, a situation that reiterated fear of exposure to the virus amongst South Africans.
Leading department stores were subject to global disruptions in the supply chain, a challenge exacerbated by civil unrest in July 2021, the Transnet cyberattack and the power cut that affected China. For instance, after Retailability confirmed an attack on Edgar’s distribution centre in July 2021, the company later raised concerns over the power cut in China that led to two weeks of delays in addition to the four weeks already experienced due to the pandemic.
Department stores will benefit from improving socioeconomic conditions, with economic recovery likely to boost spending confidence. On the other hand, the acceleration of the country’s vaccination drive will encourage households to return to shopping centres and subsequently drive up footfall in department stores.
Decisions by department stores to shift to local sourcing will help support the expected recovery of department stores, as it creates a sustainable route to market and therefore, improves the inventory management system. The initiative will also add value to operating systems by mitigating issues such as currency depreciation while reducing operating costs through tax incentives.
The omnichannel approach will remain vital for department stores over the forecast period, as operators leverage improved internet penetration and demand for convenience to add value to their services. The shift will be even more relevant for brands such as Edgars that are seeking to reposition themselves in the South African retailing landscape.
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Understand the latest market trends and future growth opportunities for the Department Stores industry in South Africa with research from Euromonitor International's team of in-country analysts – experts by industry and geographic specialisation.
Key trends are clearly and succinctly summarised alongside the most current research data available. Understand and assess competitive threats and plan corporate strategy with our qualitative analysis, insight and confident growth projections.
If you're in the Department Stores industry in South Africa, our research will help you to make informed, intelligent decisions; to recognise and profit from opportunity, or to offer resilience amidst market uncertainty.
Department stores are chained or independent retail outlets that usually exceed 2,500 sq metres of selling space, are typically in high-street or shopping mall locations, and have a primary focus on selling a range of non-food/drink/tobacco merchandise across several categories in different departments. Department stores usually have a mid-to-upper price positioning. Example brands include Macy’s, Marks & Spencer, and Takashimaya.See All of Our Definitions
This report originates from Passport, our Department Stores research and analysis database.
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