Independent stores in Cape Town enjoy average transaction values up to 49% higher than retailers in Johannesburg.
This is among the finding of the Vend 2019 Retail Benchmarks Report, which 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%).
Vend’s 2019 Retail Benchmarks Report analysed the data of more than 13,000 independent stores in North America, the UK, Australia, New Zealand and South Africa over the last financial year (April 2018 – March 2019), looking at monthly revenues, gross profit margin, number of transactions processed per month, transaction value, basket size and number of customers.
The report 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.
“It’s not easy for small retailers to benchmark their performance against that of their peers, so Vend’s Retail Benchmarks Report allows Vend customers around the world to assess their performance and identify opportunities for improvement,” says Higor Torchia, MD: EMEA for Vend. “This research is one of the many ways in which Vend is working to make independent retailers’ lives easier. One of the benefits of Vend is that it enables retailers to develop a more loyal customer base, and we see the evidence of this reflected in South Africa’s high customer loyalty numbers.”
Vend’s 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 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, while 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) and 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, jewellery, and shoes processed the fewest transactions. By region, the average transaction value was highest in North America (R800) and lowest in South Africa (R529).