Who Owns Whom

Retail Trade of Furniture and Appliances 2015

Nina Shand | South Africa | 27 November 2015

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R 1 900.00(ZAR) estimated $ 120.93 (USD)*

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Report Coverage

The Retail of Furniture, Appliances and White Goods discusses conditions in the local sector, the responses of retailers to slow economic growth and factors influencing the sector’s success. The report also profiles 17 retailers, including United Furniture Outlets (Pty) Ltd t/a UFO, which has 28 stores countrywide, and the Mr Price Group, which has 166 Mr Price Home stores and 278 Sheet Street stores.

Retail of Furniture, Appliances and White Goods

This report focuses on the retail of furniture, appliances and white goods, one of South Africa’s smallest retail sectors, which contributed just 5% to total retail sales in 2014. Currently there are only four main furniture and appliance retailers left in the market after the collapse of Ellerines at the end of 2014 when its parent company, African Bank, went bankrupt.

A sector Dependent on Credit

As many of the products sold are high-value items, this retail sector has traditionally relied on the granting of credit to consumers, with nearly 70% of goods bought on credit. However recent changes to government legislation, specifically the Consumer Protection Act and the National Credit Act, have restricted consumers’ access to credit. This is likely to be intensified in light of slow economic growth and the growing indebtedness of consumers. The contravention of the National Credit Act during 2015 by two major retailers, Lewis and the Joshua Doore (JD) Group, is likely to result in tougher regulation and retailers having to become more reliant on their products rather than financial services for income.

Response to Economic Conditions

With growth in the sector forecast at less than 2% in the short-term, retailers are attempting to control costs by focusing on ongoing organic growth, greater efficiencies and diversification. With a GDP of nearly 5%, rising household incomes, fast urbanisation and a growing middle class, sub-Saharan Africa is viewed by furniture retailers as a region of massive potential. Meanwhile internet retail, although still a small market locally, is gaining momentum and there is an increase in the number of internet retailers specialising in fast-moving consumer goods.

Table of Contents

PAGE
1. INTRODUCTION 1
2. DESCRIPTION OF THE INDUSTRY 1
2.1. Industry Value Chain 2
2.2. Geographic Position 4
3. SIZE OF THE INDUSTRY 4
4. STATE OF THE INDUSTRY 9
4.1. Local 9
4.1.1. Corporate Actions 13
4.1.2. Regulations and Government Programmes 14
4.1.3. Enterprise Development and Social Economic Development 16
4.2. Continental 17
4.3. International 19
5. INFLUENCING FACTORS 20
5.1. Labour Resources 20
5.2. Economic Environment 21
5.3. Credit and Debtor Book Management 21
5.4. Rising Input Costs 22
5.5. Cyclicality 23
5.6. Information Technology 23
5.7. Environmental Concerns 25
5.8. Logistics and Distribution 26
5.9. Research and Development (R&D) and Innovation 27
6. COMPETITION 28
6.1. Barriers to Entry 29
7. SWOT ANALYSIS 30
8. OUTLOOK 30
9. INDUSTRY ASSOCIATIONS 31
10. REFERENCES 31
10.1. Publications 31
10.2. Websites 32
COMPANY PROFILES 33
CASH CONVERTERS SOUTHERN AFRICA (PTY) LTD 33
CASH CRUSADERS FRANCHISING (PTY) LTD 37
CORICRAFT GROUP (PTY) LTD 39
EDCON LTD 41
FAIR DISCOUNTERS (PTY) LTD 45
FOSCHINI RETAIL GROUP (PTY) LTD 46
HOMECHOICE (PTY) LTD 49
JD GROUP LTD 51
LEWIS GROUP LTD 59
MASSMART HOLDINGS LTD 62
MR PRICE GROUP LTD 67
NUNGU TRADING 478 (PTY) LTD 72
PICK N PAY STORES LTD 74
SHOPRITE HOLDINGS LTD 79
TELJOY (PTY) LTD 85
UNITED FURNITURE OUTLETS (PTY) LTD 87
VERIMARK HOLDINGS LTD 89