Its so sad, to walk through a shopping mall in South Africa today. Not only do you get a sense of emptiness with little foot traffic and not much buying taking place, but the amount of closed stores tell you the virus is taking its toll.
Job losses, salary cuts, and concern over the future, impacts the buying habits of our population. When you no longer have a steady income, the last thing you are thinking about is buying a new pair of shoes! Unfortunately all retail businesses work on the same principle. Buy merchandise at as low a cost as possible and sell at as high a cost as you can. You need customers with cash in thier wallets to frequent your store and buy product from you. Then at the end of the Month, the business can pay the store rental, staff cost, utilities, cost of product and hopefully make a profit. If revenue is less than expenses, then it’s only a matter of time before the business has to close.
The business owner packs up, moves out and leaves an empty store. The landlord will find it difficult to find a new tenant to take over the lease so the store will sit empty making no money in rental for the mall.
Some stores pride themselves on selling goods of quality at premium prices to the affluent consumers. Now R1200 for a fashion shirt becomes expensive in the middle of a worldwide pandemic. The reality is, it will take many years for the world to return to a consumer driven economy, as we have known it in the past. Designer shoes and fashion item are no longer important. Paying your rent and feeding the family take preference and luxury buying is a thing of the past.
The strong will survive but not at the same profit rate they have been use to over the last few decades. It is a time for all to reflect and adjust to the new normal.
Enjoy your shopping