Retail Recovery in South Africa: The Rise of Value-Focused Tenants

Strategic Insights -

As South Africa's retail sector continues to rebound, shopping malls are undergoing a transformation, forcing landlords to rethink their strategies and priorities. Despite global headlines predicting the demise of brick-and-mortar retail, South Africa's malls have proven resilient, with retail trade sales rising by 3.7% in Q2 2025 compared to the same period in 2024. The key driver of this resilience is the shift towards value-focused retailers, offering affordability, convenience, and broad appeal across diverse income groups.

Key Takeaways:

  • The rise of value-focused retailers as key traffic drivers in malls is a significant shift in tenant strategy, filling a gap left by mid-market fashion and department stores.
  • Jamie Williams, head of business development at MR.DIY South Africa, notes that consumers across all LSM groups are demanding affordable, everyday essentials, changing how landlords think about tenancy and prioritising retailers that offer consistent footfall and broad appeal.
  • MR.DIY's mall-first strategy, entering the South African market in 2025, has been successful, with stores in high-traffic centres building brand visibility and consumer trust.
  • Landlords are rethinking partnerships, prioritising retailers that bring a differentiated product mix, high SKU counts, and a broad customer base, driving repeat visits and longer dwell times.
  • The winning trifecta of location, logistics, and local relevance is crucial for retailers, with MR.DIY's store in Richards Bay, near a taxi rank and train station, ensuring a steady stream of foot traffic.
  • Adaptability and localisation are key, with retailers adjusting product mixes to suit local demographics and relying on resilient distribution chains for rapid replenishment and agile stock management.
  • The rise of value-led, convenience-focused tenants is a signal of where the market is heading, offering a shared opportunity for mall owners, retailers, and consumers.
  • South Africa's retail recovery is far from complete, with high unemployment, rising living costs, and load shedding continuing to weigh on consumer confidence, but there are green shoots growing in the spaces where landlords and retailers are working together to meet evolving needs.

Statistics:

  • Retail trade sales rose by 3.7% in Q2 2025 compared to the same period in 2024.
  • MR.DIY has over 5,000 stores across Asia and Europe, with a strong presence in high-traffic centres.
  • The median markup of MR.DIY's products in South Africa is 30%, lower than the 40% average in other Asian markets.

Sources:

  • [MR.DIY website](https://www.mrdiy.com)
  • [Jamie Williams, head of business development at MR.DIY South Africa](https://www.bizcommunity.com/article/181,177,323421.html)
  • [Retail trade sales data, Statistics South Africa](https://www.statssa.gov.za/publications/P0441/2025-08-20-Q2.pdf)
  • [SyndiGate Media Inc.](https://www.syndigate.info/)