Why Can’t South Africans Shop Around the Clock?

Yesterday was Sunday, and if I had wanted to do some shopping, it would have been before 1pm, when my local Pick n Pay closed. With Woolworths it was 3pm. There is a nearby Spar which stays open until 8pm, and there are service stations with 24 hour shops. Why this wide range of opening times, and why can’t ZA consumers shop around the clock, as is the case in many other countries? ZA Confidential sought the views of some of our experts….

Massmart CEO Grant Pattison:

I think that this will become a reality sometime in the future, but only when the economics support it. The reality is there is are very high overhead costs to run a store in South Africa in respect of security and shrinkage control costs. The incremental turnover would need to be high to justify it. There are also issues of security and travel arrangements to be made for our employees, as the normal travel services don’t operate all night.

Nedbank CEO Mike Brown:

There is more than one reason why banks have the current opening hours. The whole banking system is designed so that every day all of the transactions are cleared and money lands in the right accounts. Historically, banks closed at a particular time to allow work to start on settling transactions. While it may appear that branches are closed, our IT centres work through the night, and this is not a trivial task. We have also experimented with longer hours and weekend banking in some branches – all moderately successful. I am not sure the economics make enormous sense – not massively compelling. There is a cultural thing – how people are used to doing things. In South Africa, for security and transport reasons, most of the hubs aren’t buzzing at night with foot traffic. Most transactions can be done via ATMs or via the internet or via apps, so most people’s need to go into a physical branch is diminishing. Security is in people’s minds- and costs after-hours go up.

Chris Gilmour from Absa Investments:

I think it highly unlikely that more than a handful of stores will go this route for a variety of reasons. There is not a culture in SA of EXTREMELY late night shopping. A laager mentality pervades Gauteng in particular, where the bulk of the South African population resides. This of course is not the situation in the Western Cape, however, where shops tend to close significantly later than the 5:30pm witching hour in Gauteng. Then there is crime. In the US and UK, where crime levels are substantially lower than in SA, it is viable to have 24-hour shopping. Here, where cash would be changing hands in the early hours of the morning, it is just too risky. This is ironic, as supermarkets typically have deliveries taking places all through the night, so the premises are often staffed and able to sell to customers. Also, shopping malls, in which the bulk of supermarkets are located, tend to close fairly early in Gauteng, in particular. The number of people wishing to shop at all hours of the night is too small to justify late night opening – other than as an adjunct to mobile customers doing impulse buys when buying fuel. Planet Fitness used to offer 24-hour gym facilities across the group but from what I can gather, this has been severely attenuated. The main reason being that there just wasn’t the demand at, say, 3am or 4am. SA doesn’t really have a very late night shift working culture that would mean people frequenting gyms or retail outlets in the small hours of the morning. Public transport hardly exists in SA beyond about 10pm, so 24-hour supermarkets would have to rely almost exclusively on people with their own vehicles or the odd itinerant shopper on foot.

Duane Newman from Cova Advisory:

24/7 Supermarkets linked to garages are a well established concept in South Africa. I am not convinced that more retail outlets will be taking up the opportunity due to the numerous risks involved including security for workers and customers and transport logistics for staff. I have personally found with my wife’s coffee shop that after a certain time in the day, the nature of the clientele changes, which increases the risk. We actually went the other way and closed earlier on a Friday due to the increased risk.

Conclusion:

It seems that unless there is a big demand among consumers for longer shopping hours, not much change is likely. However, I continue to wonder why some malls choose to close so early at weekends, and whether there would be enough flow of customers if they were to change their hours. Maybe we should just welcome the fact that internet technology allows us to shop and bank around the clock, without leaving the safety of our living rooms?

Tweet of the Day:

Bruce Cooper (@BruceRelates): Bob Hope on turning 90 – ‘You know you’re getting old when the candles cost more than the cake.’

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