GG so I think one of the things
we've seen in the rural retail
sector is quite a bit
of growth.
And one of the reasons we think
that is, is linked to the value
and growth in the
informal trading sector.
And we'd like to now hear from
you on some interesting sort of
perspectives and experiences
you've had in the past
in this sector.
Sure, yeah.
I think one of the mistakes we
make is surrounded by this kind
of negativity and stories about
unemployment being so high and
stuff like that.
And we miss the fact that there
is this huge informal economy,
everything from like the Spaza
sector's a R160bn sector,
the fast food sector, what I
call kasi kos, which is
everything from like what's
called a quarter to
chicken dust, is a R90bn
a year sector.
And I often tell the example,
for instance of Mbali,
who's got seven chicken dust
outlets like a grilled chicken
outlet who buys a thousand
chickens a week for R40 rand
and sells them for R110
once they're grilled, you know,
who's making a huge amount of
cash money in this economy.
We have the tavern sector,
R110bn a year sector,
premiumising from this kind of
shebeen where you sit on a
crate to
really elaborate places.
The hair salon sector,
R10bn a year.
And also, the growth of of hair
extensions and lashes and
nails and stuff.
It's really accelerating.
We've just seen like,
for instance, a growth of 64%
over the last four years of
imports of hair extensions into
this kind of space.
And there's many others.
We look at the more
rural environment,
the muti trade,
herbal traditional medicine is
an R18bn a year sector.
So these are big incomes coming
into people's lives.
And that is clearly fueling the
formal economy because those
people are having to either
import the hair extensions or
get the raw materials for the
food or alcohol.
Johnnie Walker Blue or whatever
it might be.
So we're often ignoring that
and the spend
that's happening,
for instance, in the
retail environment,
whether it's in malls
or supermarkets, is often
income that's been earned
within this informal economy.
And those people could be
seen as unemployed.
For instance, the backroom
rental sectors are R20bn
a year sector.
Spaza rental.
The foreign traders rent
from South Africans.
That's a further R25bn.
So that's R45bn in passive
rental incomes received by
South African households.
So again, you know,
when someone's coming to shop
in the shopping centre,
they could be unemployed,
but they could be earning, say R
7500 a month in
rental incomes.
And that's usually all sort
of cash trade.
And I think what we see,
there often is sort of a
premiumisation in the way
people shop and the value
proposition for our client base
certainly is that sort of cash
trade influencing trading
densities and getting them
higher rentals in these malls
and often sort of very little
to no rental reversions and
higher development yields.
So I think there's a very
strong link in how these malls
are performing to the strength
of this informal and really
cash economy that we
see there.
Yeah look, it is huge.
I mean, just if you look at the
cash economy, you know, at the
end of the month, the first and
last week of the month,
the social grant recipients,
everyone's going
to withdraw cash.
And so you have these queues at
the shopping centres,
people withdrawing their cash
because when they spend it in
the informal economy,
they're spending it in cash.
Very low kind of acceptance of
card or other form
of electronic payments.
And so yes, to your thing that
there is a huge amount of cash
circulating in this space and
we're not really understanding
how big that cash economy is.
But we certainly seeing it in
retail turnover and footfalls
within those environments.
And what's also happening is
people are travelling less.
So, you know, the taxi industry
has impact in terms of leaving
the township and moving
out the township.
People are increasingly
shopping either at a shopping
centre or at a retailer which
is within a local taxi drive,
as opposed to
leaving their environment.
So, you know, that inward look
in a sense is
growing that space.
Yeah, and then there's also,
of course, the social impact
that I think the development of
these centres in the
rural areas have.
I think a lot of the developers
have to develop the
infrastructure together with
the centres
that they're building.
You know the
roads leading there,
they're building taxi
ranks and, you know, all those
kind of things.
And I think it has a very nice
follow on in terms of job
creation and, you know,
all these other opportunities
that flow from it.
Access for informal traders to
sort of grow their businesses
into more formal trade.
So to your point on Mbali you
know perhaps selling a chicken
in a shopping centre as opposed
to on the side of the
road.
Yeah, so I think that there is
a big impact from those centres
in those kind of places.
But I do think that there's a
bigger opportunity because,
you know, like Mbali,
she desperately wants to get a
chicken dust outlet in a local
shopping centre, but she
doesn't qualify because she
doesn't have all the kind of
paperwork and proof of turnover
and stuff like that.
Same with a hair salon,
you know, there's a lady Palesa
I talk about, you know,
she's 20 years old.
She employs ten staff.
She's working from like this
kind of gazebo.
She's desperate to have a hair
salon in like a
more formal space.
Again, she doesn't have all
the right things.
So there's a real opportunity
to look at that and say, hey,
there is this large number of
businesses in this space and
how could we allow them better
access into this?
And also how do we create kind
of incubation?
The Mall of Thembisa has a Kasi
incubation lab as part
of their mall.
And they allow some
local businesses, creatives to
come and operate
from that space.
So I think there's really big
opportunities to look kind of
broader in terms of who could
be your tenants and how could
you enable them to trade from
those spaces, not just about
creating jobs and a place
and closer proximity.
So Mrs Dlamini spending less
money on a taxi,
that's all really cool.
But I think there is a bigger
opportunity out there that can
really create reciprocal
benefits to both the the centre
as well as the
local business community.