BMI’s Q409 South Africa Retail Report forecasts that the country’s retail sales will grow fromUS$61.59bn in 2008 to US$95.94bn by 2013. Key factors behind this will be underlying economicgrowth, rising disposable income, falling unemployment, increasing urbanisation and the emergence of ablack middle class.
South Africa’s nominal GDP was US$276.91bn in 2008, with a decline of 1.9% now assumed for 2009 asthe economy goes into reverse. Average annual GDP growth of 2.5% is now predicted by BMI between2008 and 2013. With the population increasing from 48.7mn in 2008 to an estimated 51.2mn by 2013,GDP per capita is forecast to rise by nearly 62% by the end of the forecast period, reaching US$9,208.We believe that consumer spending per capita will increase from US$4,115 in 2008 to US$6,411 by2013.
Consumer spending is boosted by foreign visitors to South Africa. In 2007, according to Statistics SouthAfrica (SSA), there were 9.2mn tourist arrivals - a 7.6% increase over the previous year. The FIFAWorld Cup in 2010 is set to attract an even greater numbers of visitors.
In 2005, 64.1% of the South African population was described by the UN as economically active, with37.7% in the crucial (for retail sales) 20-44 age range. By 2015, 64.3% of the population is expected to beeconomically active, while the proportion of those in the 20-44 age band is forecast to reach 38%.Growing urbanisation is also contributing to a vibrant retail sector, with a 26% increase in the number ofurban households between 1994 and 2005. In 2005, less than 58% of the population was classified by theUN as urban and this is forecast to increase to more than 64% by 2015.
According to data from SSA, sales of textiles, clothing, footwear and leather goods amounted toUS$11.64bn in 2008, or 18.9% of the total retail market. Home décor sales were US$4.31bn, representinga 7% market share, while furniture and appliance sales totalled US$3.88bn, or 6.3% of market share.Cosmetics and toiletries accounted for US$2.65bn of sales, giving them 4.3%. Assuming these marketshares stay as they are, BMI forecasts textile sales of US$18.13bn by 2013, with home decor worthUS$6.72bn, furniture and appliances taking US$6.04bn, and cosmetics and toiletries accounting forUS$4.13bn.
According to BMI data, retail sub-sectors that are predicted to show strong growth over the forecastperiod include consumer electronics, sales of which are expected to increase from US$6.13bn in 2008 toUS$9.25bn by the end of the forecast period, a rise of nearly 51%. Sales of over-the-counter (OTC)pharmaceutical products are predicted to increase by more than 53%, from US$0.42bn in 2008 toUS$0.64bn by 2013. Automotive sales are forecast to rise by 41.0% during the period, from US$12.50bnin 2008 to US$17.62bn by 2013.
Retail sales for our set of Middle East and Africa (MEA) countries in 2008 amounted to an estimatedUS$382bn, based on the varying national definitions. Total consumer spending for the region based onBMI’s macroeconomic database amounts to US$660.41bn. In 2008, the United Arab Emirates (UAE),Saudi Arabia, Egypt and South Africa together accounted for an estimated 79.8% of regional retail sales,and their combined share is expected to rise to 80.7% by 2013. For South Africa, the estimated 2008market share of 16.1% is expected to rise to 17.0% by 2013.
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