The Vend 2019 Retail Benchmarks Report, released today, assesses the state of independent retailers around the world.
In South Africa, the report found that independent stores in Cape Town record an average of 374 transactions per month compared with 470 transactions per month in Johannesburg stores, but that average transaction values are significantly higher in Cape Town (R547*) than in Johannesburg (R366). Gross margins were also higher in Cape Town (47%) than in Johannesburg (43%).
The Vend report analysed the data of more than 13,000 independent stores in North America, the United Kingdom, Australia, New Zealand and South Africa over the last financial year (April 2018 to March 2019), looking at monthly revenues, gross profit margin, number of transactions processed per month, transaction value, basket size and number of customers.
It 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 – against the global average of 637, and that South African retailers have the highest average basket size, with an average of 2.84 items per basket.
The research 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 the equivalent of R443,948. South African retailers 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 and South African retailers generate the least per store, at an average of R187,245 per store.
Globally, beer, wine, and liquor stores earned the most (R742,904) in gross monthly revenue, followed by furniture stores (R607,579). The lowest revenue-grossing retailers include office supplies, stationery, and gift shops (R315,947) and retailers in the hobbies and musical instruments space (R319,008).
In South Africa, average gross monthly revenue per store was highest for beer, wine and liquor stores (R506,251), shoe stores (R325,015), followed by sporting goods stores (R313,531), and home furnishing stores (R206,476). The report also noted that the South African fashion and accessory vertical had shown solid growth in the past year, with average monthly revenues per store increasing by 13% from 2018 to 2019.
The independent retailers with the lowest per store revenue globally include cosmetics stores (R201,177) and office supplies (R232,301). In South Africa, the lowest revenue earners were beverage manufacturing stores (R39,944), and cosmetics, beauty supplies, and perfume stores (R62,986).
For deeper insights into how independent retailers are faring, Vend assessed the gross profit margins of Vend retailers and found that on average, merchants had a margin of 53.33%, with North American retailers showing the highest average gross margin of 53.46 and South African retailers reporting the lowest – at 46.16%.
In South Africa the top gross margins were in the jewellery, luggage and leather goods (66%) cosmetics and perfume (62%), home furnishings (59%) and shoe stores (58%). Lowest gross margins were reported by SA’s beverage manufacturing (12%) and sporting goods stores (28%).
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, jewelry, and shoes processed the fewest transactions. By region, the average transaction value was highest in North America (R800) and lowest in South Africa (R529).
*Research was conducted using US dollar values, rounded down and converted to ZA Rands as at the exchange rate of 20/06/2019.
