SA’s major retailers are increasingly expanding their footprint, betting on scale for success in a market that is fiercely competitive, but they may be running out of space to occupy, according to the latest Absa Merchant Spend Analytics report.
The report has revealed that the country is approaching retail saturation, as malls race to fill every available patch of land.
The country now has about 23.4-million square metres of shopping centre space spread across nearly 1,960 malls, and ranks sixth in the world for total retail floor area, according to the report. But the spending to support it is not keeping pace.
Trading densities, a measure of how much revenue retailers generate, average R41,162/m², well below global standards. Even in the best trading periods, such as the 2024 festive season, densities peaked at R65,000/m², still far behind developed markets, where top-performing malls exceed the equivalent of R100,000/m².
The gap is widening as consumer wallets remain under pressure. Yet the biggest supermarket, fashion and fast food groups are doubling down on footprint expansion, betting that presence, not pricing, will secure their share of the market.
Shoprite, deemed the continent’s largest retailer, plans to open more than 300 stores in its 2026 financial year, while Spar is hard at work to open 40 high-end stores.
It is a different story for struggling Pick n Pay. CEO Sean Summers recently told Business Day that the retailer is no longer chasing scale, confirming that the race to be the biggest is over as the group focuses instead on improving store quality, profitability and operational fundamentals.
Retailers are also pushing into rural and peri-urban areas hoping to capture untapped demand and offset slowing growth in cities.
“Theoretically, SA is not overbuilt compared to global standards in per capita terms. However, the existence of large retail clusters in provinces like Gauteng plus high vacancy rates in oversupplied regions suggest localised oversaturation,” Absa said.
“While national per capita floor space remains modest, dense pockets of retail in urban centres may generate a perception of oversupply while broader regions still have capacity.
“SA’s retail trading density landscape presents a mixed performance. While the national averages indicate underutilised space and weaker revenue conversion relative to international benchmarks, pockets of resilience, especially in luxury retail and well-positioned super-regional malls, are evident. These segments demonstrate that when supported by location, brand strength and consumer demand, SA retail can achieve world-class trading metrics.”
Absa’s figures point to a slowing in-store spending growth rate of just 2% year to date, compared with double-digit increases in online spending. Physical stores still account for nearly 90% of transactions, but their momentum is fading as consumers move to digital shopping and alternative payment methods such as buy-now-pay-later and mobile wallets.
Absa said pockets of localised oversupply in Gauteng, KwaZulu-Natal and the Western Cape mask the weaker trading conditions across smaller towns and secondary centres.
Super-regional malls continue to perform relatively well, but smaller community centres are feeling the squeeze as spending fragments across too many outlets. The Western Cape remains the most resilient market, supported by tourism and stronger infrastructure, but national performance remains uneven.
