Joburgers might shop more often, but Capetonians drop more cash - study

New research has revealed that consumers spend more money in Cape Town stores, while Johannesburg enjoys more regular sales than the Mother City.

The global research analysed how retailers across regions perform.

The 2019 Retail Industry Benchmarks Report, released on Tuesday by Vend - a cloud-based retail software platform for independent retailers - assesses the state of independent retailers around the world.

According to the report, independent stores in Cape Town record an average of 374 transactions per month, compared with 470 transactions over the same period in Johannesburg stores.

However, average transaction values are significantly higher in Cape Town: R547 per transaction, compared to R366 in Johannesburg.

“Gross margins were also higher in Cape Town (47%) than in Johannesburg (43%),” the report found.

The research analysed the data of more than 13,000 independent stores in North America, the UK, Australia, New Zealand and South Africa over the last financial year (between April 2018 and March 2019). It looked at monthly revenues, gross profit margins, the number of transactions per month, transaction values, basket sizes and the number of customers.

“The report found that retailers in North America and South Africa had the highest customer numbers, with an average customer count of 808.82 and 800.08 respectively,” said the report's authors..

The study also found that South African retailers have the highest average basket size, with an average of 2.84 items per basket.

“It’s not easy for small retailers to benchmark their performance against that of their peers, so Vend’s Retail Benchmarks Report allows Vend customers around the world to assess their performance and identify opportunities for improvement,” said Higor Torchia, Vend’s managing director.

“This research is one of the many ways in which Vend is working to make independent retailers’ lives easier. One of the benefits of Vend is that it enables retailers to develop a more loyal customer base, and we see the evidence of this reflected in South Africa’s high customer loyalty numbers.”

The report found that globally, independent retailers have a monthly average revenue of R413,425 across all stores, with North American retailers generating the most revenue, grossing R443,948.

South African retailers, the research showed, grossed the least - with a monthly average revenue of R268,689.

"From a per-store perspective, New Zealand and Australian retailers lead with R318,965 and R318,079 respectively. South African retailers generate the least per store, at an average of R187,245 per store,” said Torchia.

Globally, beer, wine and general liquor stores earn the most (R742,904) in gross monthly revenue, followed by furniture stores (R607,579). The lowest revenue-grossing retailers include those selling office supplies, stationery, gifts and musical instruments.

In South Africa, average gross monthly revenue per store was highest for beer, wine and liquor stores, followed by shops selling shoes, sporting goods stores and home furniture.

The report also noted that the South African market for fashion and accessories had shown solid growth in the past year, with average monthly revenues per store increasing by 13% from 2018 to 2019.

Independent retailers with the lowest per-store revenue globally include those selling cosmetics and office supplies.

 “In South Africa the lowest revenue earners were beverage manufacturing stores and cosmetics, beauty supplies, and perfume stores,” noted the report.

“Not surprisingly, retailers that sell consumable goods, food and beverage stores and vape shops had the highest transaction counts, while retailers that sell high-ticket items such as furniture, jewellery and shoes processed the fewest transactions."

By region, the average transaction value was highest in North America (R800) and lowest in South Africa (R529).