Retail Market Outlook

Growth Projections:

The Bureau of Market

Growth Projections:

The Bureau of Market Research (BMR) forecasts a 7.0% increase in nominal retail sales and a 2.0% rise in real terms for 2025.
This growth is attributed to easing inflation, improved infrastructure, and a modest rebound in consumer spending. 

Consumer Behaviour Shift:

A report by NIQ indicates that South African consumers are increasingly prioritizing value,
with private label brands achieving a 7.1% sales value growth in 2024, totaling R98.7 billion. 

Private Label Trends

Market Share Expansion:

Private label products now account for approximately 18% of total FMCG sales in South Africa,
reflecting a significant increase in consumer adoption. 

Retailer Strategies:

SPAR: Aims to achieve 28–30% of sales from in-house brands over the next three years, focusing on competitive pricing and quality.

Clicks: Reports that over 26% of its sales comprise private label brands, with many products manufactured locally. 

Consumer Preferences: Shoppers are increasingly opting for private label or store brands, driven by value, quality, and trust. 

Retail Developments

SPAR's Expansion:
Plans to open 30 to 40 high-end grocery stores branded as SPAR Gourmet, targeting affluent shoppers with premium offerings. 

Makro's Offerings:
Introduced exclusive Walmart private label products in its stores, including toys, snacks, and baby care items. 

Pepkor's Acquisition:
Acquired fashion businesses Legit, Swagga, and Style from Retailability, expanding its footprint in the adult clothing market. 

Consumer Trends

Sustainability Focus: There is a growing demand for locally sourced and sustainably packaged products,
influencing retail strategies. 

E-commerce Growth: The expansion of online platforms and small-format outlets is reshaping the retail landscape,
offering convenience and broader access. 

For manufacturers and retailers, these developments highlight the importance of aligning with consumer preferences for value,
quality, and sustainability. 
Embracing private label strategies and adapting to evolving market dynamics can offer significant growth opportunities in South Africa's retail sector.