Welcome to our newsletter that provides commentary on themes emerging from our live Market Reports. This month, we're having a look at general trends across the major retail categories.

If retailers had a prize giving for the 12 months of the year, February would get the Participation Award. Maybe the Spirit Award, too. February does have Valentine’s day – that most anticipated or most dreaded day – and strange quirks like leap years. But even an extra trading day in 2024 is not going to save February from being the most inconsequential month of the year from a spending perspective. Take the Apparel category: Even though February only has 7% fewer days than the average month, it attracted 33% less spending than an average month. Consumer discretion bites hardest in February but luckily there’s still a lot of interesting data to explore as we track South Africa’s retail performance.

Starting with a February pulse check: Total Spending increased modestly, albeit still at a low growth rate (below inflation). The main highlights from the chart below are the diverging growth rates among Pharmacy and Apparel retailers.

Anecdotally, 2024 has started with an unseasonably high prevalence of viral infections that appear to have translated into good fortunes for Pharmacy retailers, where growth accelerated positively during the month. In contrast, spending on Apparel continues to diverge from growth in Total Spending, with its weakest performance to date in February. (Admittedly, the base in 2023 was quite strong.)

SPENDING GROWTH BY CATEGORY

February might be exempt from our criticism if you’re a Grocery retailer because spending on food is less discretionary. With that in mind, grocery spending during February accelerated modestly: Checkers continues to lead the market although Shoprite’s growth appears to be lagging in recent months. The growth trajectories for Pick n Pay and Spar improved in February, but growth is still very weak and these retailers continue to cede market share to Checkers.

SPENDING GROWTH: GROCERY

Expect Pick n Pay to laud its online performance when it next reports. It’s true that the group’s on-demand delivery service – asap! – has grown rapidly in recent months as it goes toe-to-toe with Checkers Sixty60.

But that growth is likely to be immaterial in the short-term, since Sixty60 continues to dominate the grocery delivery category, attracting c78% of total on-demand spending in February 2024.

As we showed in Boxer steps into the ring and Checkers’ 360, PnP’s problems lie in- store – they need to entice once-loyal shoppers back through the doors.

GROWTH IN SPENDING AND LATEST SPENDING SHARE: ON-DEMAND GROCERY SERVICES

Reveal’s spending analysis on Lotto and Sports Betting offers a unique view of this rapidly growing category. In January 2024, the National Lotto achieved its highest spending share in this category for more than 18 months, but a more interesting trend is the divergence in fortunes for two major sports betting operators: Betway and Hollywood Bets.

It was a two-horse race at the start of 2023. Both operators had similar spending share in the category, with Hollywood Bets having closed the gap over the preceding two years. Roll forward 12 months, however, and Betway has powered ahead.

SPENDING SHARE: BETWAY AND HOLLYWOOD BETS

Our Market Reports offer investors and retailers a detailed, real-time view of the aggregated spending decisions of actual consumers. Reveal tracks spending across seven major categories such as Grocery, Apparel and Home. Every major category is further segmented into sub-categories, and a specific dashboard is available for each. 

The Market Reports provide an overview that includes changes in market share for each retailer, as well as an estimate of growth in user spending. Users are segmented into six income brackets that allow for detailed tracking. In addition, the Market Reports include five years of historic information and other metrics, such as average transaction value and median monthly spend per user. 

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