Foreign retailers achieve healthy trade density in SA

26 Sep '12

2 min read

International retailers, who have set up stores in South Africa, have experienced a healthy trade density in the country and are developing aggressive expansion plans to increase their businesses.

Healthy trade density refers to the turnover achieved per square metre of area.

Over the last couple of years, several global apparel retail brands have opened their outlets in South Africa, one of the new emerging markets, to beat the slow growth in established economies.

One such company is Cotton On, the Australian apparel brand, which has opened several stores in South Africa in the past one year. The company now plans to launch thirty more outlets with its brands ‘Factorie’ and ‘Typo’ by the year end.

Similarly, Spanish fashion house Zara, which already owns a store in Sandton City, has expanded by opening a new 1,500 square metre outlet in Cape Town.

Recently, Arcadia Group’s Topshop and Topman partnered with South Africa’s Edcon and House of Busby to open its stores early next year.

South Africa’s retail sector is an eclectic mixture of both traditional and modern retailing systems. Due to the rapid urbanisation and the rise of the modern consumers, the country has become a lucrative investment area for retailers worldwide.

Moreover, the availability of disposable income amongst middle class people has led to an increase in demand for better products and services.

Although the entry of foreign brands will ensure a wider choice for South African shoppers, it would also pose a threat to local retailers, who will be forced to either offer better products or reduce prices.

Fibre2fashion News Desk - India