Trends

The year ahead

February 2008

12 Retail trends

1. Black Diamonds growing

Not only is there rapid growth in the number of South Africa’s Black Diamonds — from 2-m to 2.6-m between the end of 2005 and first quarter of 2007 —, but they are moving from the townships to the suburbs. At the end of 2005, 23% of the Black Diamonds lived in the suburbs, 77% in townships. Now 47% (1.22-m) live in the suburbs and 53% (1.28-m) in townships. This movement to the suburbs represents about 12 000 to 14 000 people per month.

But, 42% of the Black Diamonds living in the suburbs would prefer to live in the townships and 65% regularly participate in township activities.

TNS Research Surveys have for the past few years been conducting a fascinating series of surveys on the demographics and preferences of the affluent, upwardly mobile black consumers they named "Black Diamonds" (see www.tnsresearchsurveys.co.za).

Their findings show an important and fast-growing new consumer market that is probably unique to South Africa. For example, in the first quarter of 2007 the Black Diamonds represented buying power of R190-bn, up from R130-bn at the end of 2005. This buying power has especially grown amongst people living in the suburbs (up 15%) but has declined for people living in the townships — probably due to lack of facilities.

Although the majority (90%) of Black Diamonds prefer shopping in big malls, 50% also like to shop in smaller neighbourhood shopping centres and 39% in stores along their neighbourhood streets. Therefore, 89% shop outside big malls, as well as in the malls.

As far as sport is concerned, they are predominantly armchair enthusiasts with 70% following sport on TV or in the media, 22% attending live matches, 10% exercising at a gym and 9% (238 000) participating in sport socially or competitively.

While 47% like to eat out at a branded family restaurant, 89% buy take-aways. Other leisure activities that are most popular are hiring a DVD or video (56%), attending a church service (57%) and attending funerals (61%).

The biggest group of Black Diamonds live in Gauteng (66%) with the largest number (28%) living in Johannesburg. This is also the only urban area where significantly more Black Diamonds live in the suburbs (31%) than in the townships (26%).

Although there has been a migration to the suburbs the researchers believe that most Black Diamonds moved to the suburbs out of functionality (availability of better houses, schools, shopping centres and closer to work) as they still have very strong cultural and social roots in the townships.

Retailing in the townships will therefore continue to be a growing trend, as shown by the success of the R650-m Maponya mega-mall that opened in Soweto last year. A survey commissioned by the City of Johannesburg in 2004, for example, showed that the 1.2-m Sowetans who spend R4.2-bn on retail goods spend 75% of their money outside the township.

Subsequent to the study, several malls like the Protea Gardens Mall, Jabulani Mall and Trade Route Mall in Lenasia opened in the townships, followed by the Maponya Mall.

2. Bluetooth

Bluetooth shopping malls and stores will become a growing trend. A customer who switches on a bluetooth-enabled device like a cell phone when they enter the mall or store will be able to receive messages about new product launches, special offers, discounts, maps to the nearest store or area that stock the product they seek, and other information. These messages could also be linked to a website offering more information.

This form of marketing is expected to grow in popularity with the introduction of an ultra-low power version of bluetooth technology at a lower cost in 2009, delegates were told at a workshop presented by the Bluetooth Special Interest Group (SIG) at ispo Winter this year. Internationally, more than 13-m bluetooth units are shipped per week (also see bluetooth in products).

3. China not flavour of month

All manufacturing roads no longer lead to China as growth in SA imports from China is flattening (34% growth in 2007 compared to 49% growth in 2005). In the clothing sectors, imports have dropped by 30%.

The search for alternative manufacturing countries is a worldwide trend and cannot be attributed solely to South Africa’s introduction of clothing manufacturing quotas. Internationally several factors are costing China its preferred manufacturer status. Cost of manufacturing in China is expected to rise due to a new Chinese labour law that came into effect this year requiring companies to pay higher insurance and housing benefits for all workers, more overtime pay, holiday pay and making it more difficult for companies to fire workers through compulsory severance pay. Wages are expected to rise around 10-15% during 2008, and although this will still be low compared to Western countries, labour contributes about 50% to the cost of a garment. Other factors expected to influence costs are the appreciation of the yuan and the mounting export costs.

In addition, some Chinese manufacturers have been badly hit by accusations that the products they produce do not meet safety or quality standards. Even top fashion brands like Armani, Zara (skirts had potentially irritating levels of formaldehyde) and Dior recently had to recall products.

A drop in imports from China will, however, not necessarily benefit SA manufacturers as other markets, like Vietnam and Mauritius, are keen to take China’s place.

4. Consumer rights bill

Legislation to watch this year is the Consumer Protection Bill due before parliament. The bill makes provision for National Consumer Protection Commission to look after consumer rights and cover various other issues affecting traders and their clients. Sports Trader will keep you up to date during the year.

Visit www.thedti.gov.za/ccrdlawreview/CPBillSept21_06.pdf to download a copy of the 2nd Draft of the Bill.

In the meantime, are your staff familiar with the list of consumer rights published by the Consumer Union? They are The right to be heard; The right to be informed; The right to safety; The right to choose; The right to redress; The right to consumer education; The right to a healthy environment and The right to satisfaction of basic needs.

5. Going green

Eco-friendly will be THE trend in the coming years — not only is it a worldwide cause, but because it could be a question of survival.

South African retailers will be hard-pressed to find solutions to trading with power cuts. Who knows, it might even offer opportunities like inviting customers to come and view special events on your TV, instead of consuming electricity in their own homes.

The cost of lost trading hours due to power cuts and the need to install additional power supplies could, however, still be the biggest challenge the industry has to face over the next few years.

It costs more than R1-m for a single 650 KVA generator big enough to supply power to a small shopping centre, while a large centre like Tyger Valley would spend as much as R3 000 per hour on diesel fuel to power their industrial generators, reports Media-wed Online.

But it is not only power, or the lack thereof, that prompts environmental concerns.

According to the Retail Rewards Programmes Around the World 2007 report by Razor’s Edge Business Intelligence, retailers all over the world are taking steps to become more eco-friendly. Tesco, in the US, reward customers with card loyalty points if they bring their own shopping bags and deposit recyclable goods in a bin outside the store — 7-m of their 13-m store card members make use of this.

Wal-Mart and Marks & Spencer have both announced plans to cut down on waste in their supply chains, to use more organic and Fairtrade cotton, and run stores more environmentally friendly. They have asked suppliers to "cut their carbon footprint" (use less energy and global resources in manufacturing, including flying).

Nike already started producing more eco-friendly footwear in 2005 with their Considered outdoor collection, made with fewer components. They have now pledged to apply the same eco-friendly principles across its business units by reducing waste in product design and packaging, cutting-out volatile organic compounds and increasing its use of eco-friendly materials. The Air Zoom Affinity was, for example, produced with 38% less waste, 40% less solvents and 33% recycled materials.

Brooks is launching a biodegradable midsole, dubbed BioMoGo, which is expected to save nearly 30-m pounds of landfill over the next 20 years. An average EVA midsole can last up to 1 000 years in a dump, BioMoGo will biodegrade in about 20 years in the same environment.

6. More malls

Judging by the furious pace at which new shopping malls are being built all over the country, developers have not yet heard the news of a supposed retail slowdown.

An interesting development is the encroachment of huge malls into rural areas — for example the Westcoast Mall that is being built in Vredenburg; the R1.2-bn retail under construction in Limpopo; the R107-m mall in Hammanskraal and a R330-m shopping centre in Jeffreys Bay, to name but a few.

The new Zevenwacht Mall, due to open in April near Kuilsrivier, will introduce the first of what will be a chain of Sports Direct stores into SA. Sports Direct and Lillywhites (see p12) belong to Retailcorp, a subsidiary of Dubai World, who also own the V&A Waterfront, Pearl Valley Golf Estate and the QEII which could be moored in Cape Town harbour during the 2010 World Cup.

If their *Palm Trilogy and *World projects in Dubai harbour are anything to judge by, their entry in the market could cost Cape Town its Sleepy Hollow title and turn the V&A Waterfront into the next Riviera, with two world class hotels already being planned.

7. Online growth

Like it or not, internet trading is going to become more important in the future: last year online spending by South Africans grew by more than 35% (to R929-m) following 33% growth in 2006 (to R688-m), according to a report from World Wide Worx, titled Online Retail in South Africa 2007. This excludes the sale of online air tickets. They contribute the growth in this market sector to more South Africans getting broadband (ADSL) and the fact that the longer people are exposed to the internet, the more likely they are to be trading online. The number of SA retail sites have grown from 826-1 041 since 2005.

A US study, co-sponsored by Business Today magazine, showed that especially small retailers benefited from online trading, with more than 40% of all small retailers saying that they generate part of their sales online. More than a quarter of the small retailers trading online said that 26-100% of their sales came via the internet.

8. Retail clusters

Instead of keeping competitors apart as far as possible, a definite trend in retailing is to cluster same-product stores together in one area of a mall, or even a dedicated shopping centre only for lifestyle/fashion brands.

The theory is that consumers seeking a specific kind of product, will be drawn to such an area of interest, with the close proximity generating more sales for all concerned.

The latest such development is the new fashion-lifestyle section in the V&A Waterfront, recently acquired by a consortium consisting of UK-based London and Regional Properties, Dubai government investment arm Istithmar, and a black empowerment grouping headed by DIH, the holding company of local private equity firm Decorum.

In the shopping wing opened in December, top class fashion names (Dolce & Cabana and Gucci) and SA lifestyle brands like Canterbury and Puma share space with a multitude of international brands.

9. RFID

RFID (Radio Frequency Identification) and all the issues surrounding it is going to become an interesting a topic for discussion during the coming year. Retailers are mostly in favour of manufacturers inserting RFID tags in products as they are a great help with inventory tracking. Some international retailers, like Wal-Mart, have already asked all suppliers to include RFID tags on the products they deliver. Consumer groups are, however, concerned about various personal security, privacy and freedom issues that could arise from the abuse of the information (although this system has been used in the transport, library and even passport control systems of many countries).

More and more international brands are implementing RFID tags to track clothing and footwear from distributor to store, the latest New Balance International. RFID is considered to be the most accurate supply chain tracker, which can alert the supplier in time when certain stocks are running low so that they can replenish in time. It is also a timeous warning system that certain lines are not selling.

10. Specialist stores

Across the world, specialist stores are opening as a counterfoil to the growing power of chains. In SA several specialist retailers have also found that their specialised products and knowledge attract customers. In major urban areas this also gives them a competitive edge against the buying power of chains.

Specialist stores are not only a lifeline for independents in heavily traded markets, but can also benefit a specific sport.

In the US, Footlocker recently teamed up with Nike to open House of Hoops, a basketball-specific store in Harlem, New York. They hope to regenerate interest in the sport in the neighbourhood by drawing youngsters to the store where they believe that knowledgeable staff and exclusive, specialised equipment will encourage the youngsters to hang out.

11. Store marketing

Any retail store is a valuable piece of property and more and more store owners are making sure that they are utilizing the space to the fullest by creating an inviting area where people can gather (even eat and drink) and socialize, especially teenagers on a mall-crawl. More and more retailers are also using their store as an advertising medium, inviting suppliers to advertise their brands, or specific products, to consumers. Whether this is through billboards, close-circuit TV ads, store within store branding units or a drop-dead storefront that lure them in.

According to Graham Leigh, director of brand company, HKLM, the average shopper is subjected to around 3 000 advertisements a day and a brand therefore have to stand out in order to grab consumer attention.

But, he warns, do not overload the consumer with visuals — static or electronic — as they will soon tune out if they get a sensory overload.

"Retail space is the moment of truth for a brand. It’s where purchase decisions are made. Retail space is ‘theatre’ and marketers often miss the opportunity to make sure that the production is in synch with the expectations!" concludes Leigh.

12. The world is coming — are Lillywhites and Sports World leading the pack?

The first store by a major international retail chain has opened in the V&A Waterfront in Cape Town, although the official store opening is only in March.

This classy Lillywhites store with its exclusive fittings (sourced with care and taste at a cost of about a million each) is nothing like its UK namesake, Leonard Erlank, MD of owner Retailcorp SA, store PR and jewellery designer Melanie Miotti and store manager Waheeda Pansari are at pains to emphasise.

Think Harrods, think off-spring of the polo and pearl set, think space, strong branding of international lifestyle names in store-within-a-store settings, think exclusive product and well-known international brands like Lonsdale introduced into SA with a splash.

"We lifted the fittings to a new level, with high polish, high density fixtures," says Erlank. "Every fitment was chosen to make customers feel special."

In addition, they spent about R800 000 on imagery, with huge billboards of international sports heroes and the familiar Lillywhites façade.

This 1 250m² well-lit retail space has been designed to offer an exclusive introduction for brands like boxing lifestyle brand Lonsdale, Antigua (one of the biggest golf brands on the men’s tour), Henry Lloyd (an above the average golf range), Voodoo Dolls, Kangol, No Fear and racket brand Donnay.

These brands are owned by Mike Ashley’s Sports Direct International, the UK group consisting of 465 Sports Direct and Sports World stores, Lillywhites and various other properties. Retailcorp has a franchise agreement with them to open the retail stores in SA and also import these brands exclusively.

Some of the Sports Direct International brands — Dunlop, Slazenger and Karrimor — are already well known in SA, where they have for years been marketed and distributed by Dunslaz Distributorship to a countrywide retail customer base.

Their own brands are interspersed with other top lifestyle footwear and clothing brands like Levi’s, Diesel, Kenneth Cole, O’Neill, Billabong, Roxy, Quiksilver, Volcom, Canterbury, Puma, Nike, adidas, Reebok and many more.

The first of five Lillywhites planned in South Africa for this year (ten in total) will compliment Retailcorps’ 27 Sports Direct stores planned for the next two years — they have already signed leases for several stores in the more than 100 locations they inspected, says Erlank.

The first Sports Direct store is planned to open in June in the new Zevenwacht shopping mall. This will be followed by a 3 750m² store in Canal Walk, which would probably be their flagship.

In five years’ time they could have 200 stores in South Africa (including their own name stores like Joe Bloggs, Peak Performance or Burberry) or far fewer, depending on how the market pans out. This they will be able to establish after they open the next seven stores, says Erlank.

While Lillywhites concentrates on international footwear and clothing lifestyle brands — apart from a high-end technical boot room and strong golf section where their own brands like Antigua and Henry Lloyd are supplemented with other golf brands — Sports Direct will be concentrating on performance product in three huge store categories, ranging from 2500m² to 3 000m² or 4 000m².

While Lillywhites will aim for exclusive product in a glitzy mall setting, Sports Direct will also look at value marts where they will hope to attract the more price conscious lower to mid-level consumer.

Retailcorp’s holding company is Nakheel, owned by Dubai World (the world’s 4th largest company), owned by the Dubai Government, who recently bought the V&A Waterfront. Among others, they also own the upmarket Pearl Valley golf estate, where the Chris Evert tennis academy will be located. These Developers of the Palm Trilogy and World Islands do not think small.

It is therefore an encouraging vote of confidence in our economy that they decided after a year-long market study to open their franchises in South Africa instead of Turkey, the European Union or India. Erlank admits that the opportunities offered by the 2010 World Cup did play a role in the decision.

What effect their entry will have on the SA retail market, remains to be seen.

It could be that they pave the way for the likes of JJB Sports and Decathlon and that this combined international battle for a slice of our relatively small market could cause local injuries.

Or it could be that their entry will be the first step to SA becoming a tourist shopping destination like Dubai or Bangkok, in which case the pie will grow big enough for all to enjoy a generours slice. After all, there are those that believe that real growth is only stimulated by competition.

 

5 Industry predictions

What does independent retailers, footwear and apparel chains, economists, global analysts and Sports Trader expect from the year ahead?

1. Bells keep on jingling

Judging by December and January sales — usually a benchmark for the year — South Africa’s independent sport, outdoor and lifestyle tra-ders do not feel as gloomy about market conditions as other sectors of the economy.

They are not quite as ecstatic about December-January holiday sales as the previous year, but retailers who gave us feedback were cautiously optimistic.

Their comments were decidedly more guarded than the year before, a sort of tentative: not bad – but what do the other traders say? As if they were scared to admit that they were actually doing better than what the economists told them they should be doing.

While 60% of the retailers who gave feedback said that they expected to do better over the holiday period, nearly a third (27%) said that their pre-Christmas sales surpassed their expectations.

Although one does not know how high their expectations were in the first place, feedback on pre-Christmas sales show that they had good reason to be happy.

» 67% of the respondents said that their 2007 pre-Christmas sales were higher than the previous year (when most in the industry couldn’t believe their good fortune);
» 27% reported more than 20% growth in pre-Christmas sales;
» 20% said sales were pretty much the same;
» 14% reported a drop in sales

This sales growth continued into January, indicating that the sport, outdoor and leisure industry is not bunking down to withstand a recession this year.

» 67% said that January sales were up on the previous year;
» 20% reported sales growth of more than 20%;
» 27% said January sales grew less than 5% on the previous year;
» 20% said sales were much the same;
» 14% reported a drop in sales (the same one’s who reported a drop in pre-Christmas sales)

There was no discernable pattern in the feedback from retailers in specific categories (e.g. outdoor or footwear) or demograpic areas.

Most of them (67%) found that their customers were most likely to spend money on medium-priced items, but the same number (20%) who reported that customers were buying at low price points, also said that customers were buying at high price points.

A sport and clothing retailer based in a large rural town whose customers were buying at lower price points, ascribes this to the overall rise in the cost of living, which has affected the amount of free cash that consumers have. "As a result they are reluctant to create debt by buying on credit. But, typically there are always consumers that are willing to sacrifice a need for a want in order to stay trendy."

He believes this will be a lifeline for many sport and apparel retailers. He also foresees that retailers will have to source cheaper products and not only rely on the international brand names for sales.

But, on the other hand, a positive or negative economic outlook is not going to sell your stock if you don’t have what your customers want.

"Market research combined with the watching of trends will pay off — listen to your market and they will serve you," is the advice of a retailer in a coastal town who believes that he lost sales because he waxed it with stock selection.

Other retailers who adapted to market needs, did well and exceeded their expectations.

Another coastal retailer, for example, experienced very good sales in ladies swimwear because he stocked costumes for mature ladies, which other retailers in the area do not carry. He also believes he did well because he catered for the growing number of customers who are concerned about UV protection in swimwear.

Then there is the weather factor that can play havoc with the sales of typical holiday goods: customers don’t buy bottom end goggles, flippers, beach bats, etc. if they can’t spend time on the beach.

An outdoor retailer found that his customers were choosier in their purchases and that they expected "more bang for their bucks".

While independents in the industry seem to be starting the year with a fair amount of optimism, most are still cautious about the outlook for the year: "I anticipate that the early part of 2008 will be challenging for retailers as continual interest rate hikes and the NCA (National Credit Act) really take effect," warns one.

But then, can anyone remember a time when the demise of the independent retailer had NOT been predicted ... and yet our mailing list keeps on growing every year.

2. Clothing chains cautious

According to Stats SA, overall retail sales slowed down from 11% year-on-year growth to 0% towards the end of last year.

From the monthly sales figures recorded by the members of the SA Retail Liaison Group (most large retail chains), it is also clear that the heady consumer spending of 2004-2005 has sadly slowed down. As can be seen from the chart below, growth in consumer spending on clothing and footwear is on a downward path. The 11-12% year-on-year growth recorded during 2007 is about half the growth recorded at the end of 2004, beginning 2005.

Apart from sales growth slowing down, the major listed retailers in the clothing sector are now also recording price inflation, ranging from 3% (Foschini) to 9% (Woolworths), while they previously recorded price deflation. This means that revenue growth is partly due to price increases.

This is partly caused by the rising inflation in the Chinese economy, driven by labour shortages in the textile industry, stricter labour laws and a decline in Chinese government subsidies.

A summary of the latest results released by some of the listed clothing chains indicate that clothing customers are buying cheaper goods. Mr Price is the only group that recorded double digit growth for their apparel division.

» Edcon: At the time of going to press, their 3-monthly results had not become available yet. Their half-year trading profit for the period ending September was R94-m, but interest charges from the Bain Capital Deal amounted to R1.19-bn.
» Foschini: Sales, including new stores, grew 4.3% in the quarter leading up to December. Same store sales for the period rose 0.4% from a year earlier, but taking into account an inflation rate of 3%, this resulted in a real decline of 2.6%.
» Mr Price: Sales increased by 14.6% in the quarter ended December, with comparable sales growing 5.2%. The group said in a trading update that inflation of 8.4% was recorded. Cash sales constituted 85% of total sales.

The apparel division, which represents 69% of sales and comprises Mr Price, Mr Price Sport and Miladys, reported sales growth of 17.5 %, with comparable sales growing by 8.7%. Inflation of 9.2 % was recorded. The apparel division grew sales by 20% in December with comparable sales growing by 10.7%.

» Truworths: Sales increased by 7% (15%, if newly-opened stores are included) for the first 26 weeks of the financial year to end-December.
» Woolworths: half-year results show sales rising by 4,7%.

But consumers are not only buying cheaper clothes — mass discounter Makro also grew sales by double digit figures.

» Massmart: In the 26 weeks to 23 December 2007 Massmart Group’s total sales increased to R20.1-bn, a growth of 11.6% over the prior year, with inflation estimated at 6.3%. Comparable store sales grew 9.5%. Divisional sales for Massdiscounters grew 7.8%, with inflation of 2.7%. Masswarehouse, which comprises the Makro warehouse club chain, grew sales by 12.6% with inflation of 5.9% (resulting in 6.7% real growth). Over the same period in 2006, sales grew by 16.4%, while sales inflation was lower at 3.7%.

3. Growing, but we worry so!

It is not just a rumour spread by Eskom, official stats show that the SA economy is in a growth curve like never before. The economy grew in the region of 5% for the fourth consecutive year during 2007, say the Bureau for Economic Research (BER).

This did, however, start to slow down towards the end of 2007 and a moderation in growth is therefore expected for 2008. This is partly due to a weaker global economy (see below), fears of a US recession, as well as the impact of higher domestic interest rates.

Uncertainty about the effect of the power crisis makes it difficult to predict future growth trends, the BER say in their report, Economic Prospects, 1st Quarter 2008. Economic Prospects, 1st Quarter 2008.

Depending on the effect of the power crisis on the mining sector, the BER now predict a GDP growth rate of 3.9% or 3.4% for 2008.

According to the Reserve Bank CPIX inflation increased by an average of 6.5% during 2007. The BER now expects CPIX peaking around 9% in February, before gradually easing towards the end of the year and dropping below 6% by December.

Despite the worsening inflation, the BER believes that interest rates are likely to remain unchanged for the rest of 2008.

This will be good news for SA consumers. South Africans are the most concerned about interest rate hikes in the world — 53% of the SA respondents in the annual Nielsen Global Consumer Confidence Study said they considered higher interest rates the worst consequence of a possible recession.

Despite good growth reported for last year, SA consumers are fairly negative. Almost three quarters (73%) of the SA respondents in the Nielsen survey said that the next 12 months will be a bad time to buy things that they want or need. Fifteen percent of them said they had no spare cash after covering basic living expenses, and only 16% said they used spare cash for holidays — in contrast to the regional average of 30% (Eastern Europe, Middle East and Africa).

4. We are not alone

If you are worried about consumers zipping their purses, take heart: we are not alone. According to the latest Global Consumer Confidence Study conducted by The Nielsen Company at the end of last year, more than a quarter of global consumers expect a global recession in 2008, resulting in a dip in confidence in 21 of the 48 markets that Nielsen surveyed.

Rising oil prices, the spread of the sub-prime credit issue in international markets and the slowdown in the US economy are all factors that are depressing consumers. People in Thailand, Taiwan, Italy and Latvia are the most negative and are most likely to anticipate a global recession in the next 12 months.

Globally, over 50% of people are concerned that a recession will lead to higher unemployment and inflation rates.

In the US consumer confidence has been declining from late 2006 and this is having an impact on economies in the rest of the world. Of the 48 markets surveyed, 26 recorded a continuing decline in the readiness of consumers to spend, compared to the previous six months.

5. The independents are dead, long live the independents

Towards the end of 2007 the major SA retail groups were opening and building new stores as if they were coloni-sing a new country. And that is set to continue during this year.

I am sure there are many that we missed, but from what we heard, TotalSport and SportScene are both opening seven new stores, Due South is opening two, Tekkie Town is going on a serious expansion drive, Studio 88 has new stores planned, Mr Price just opened a handful and are planning more. In addition, Makro now has extended sport sections in six stores. And, of course, the Lillywhites and Sport Directs are coming.

All this chain store action, of course, gave rise to the old myth being perpetuated: there are no more independents left, they could not survive against the might of the chains.

From the tables on the opposite page it should be obvious that there are at least twice as many independent stores/buyers trading in the sport, outdoor and lifestyle market, than the total number of chain stores.

While we can not vouch for the number of stores in a chain, the 2 820 independents each represent a name and address of a SA store or buyer on our mailing list (if you add the neighbouring states, there are many more). In the lifestyle footwear section you can probably multiply the number of stores with about ten as most of these buyers do purchasing for multiple stores.

And you can be assured: with the high postal rates we have NO incentive to inflate the number of retailers on our mailing list. In fact, Sports Trader is probably the only magazine that interrogates prospective readers before adding them to the mailing list in order to ensure that they are actually involved in the industry.

It is true that these independents have disappeared from the main city centres, but pick any rural town in SA and you will find a school, probably a few sport clubs and a town full of people who play sport, fish, or participate in outdoor activities. That is where you will find the independents who know the local coaches and their preferences and therefore make a good living because the locals trust them to give the right advice and proper service — after all, it is not easy living in a small town if your neighbours believe you are ignorant and incompetent.

While sport participation is therefore declining in most developed nations, there is a vast pool of potential customers out there that are only now beginning to become interested in sport.

Among them are the 2.6-m Black Diamonds who can actually afford to buy decent equipment. The SA sporting goods, outdoor and lifestyle market can only go one way: bigger and better.

The question is do you have a plan in place to reap the benefits?