Assalamu Alaikum,

Welcome to Issue #13 of MYCOE Retail Matters.

South Africa’s economy grew 0.5% in the first quarter, retail trade sales are still edging higher, and fuel prices just dropped for the second month running. On paper, the pressure is easing. But the biggest retail story this week has nothing to do with a good economy; it is a 97 year old retailer deliberately shrinking to grow. This issue, we unpack why the smartest retailers are choosing smaller, sharper formats over bigger footprints, and what that means if you run one store or five.

Retailability took over the 97 year old Edgars chain in 2020 out of business rescue. The first move was not expansion, it was retreat. Over the following years the group right-sized the store network, handing back more than 100,000 square metres of retail space to landlords.

Three years later, the strategy has flipped. Edgars is now rolling out 50 new next-generation community stores over the next two years, with the first locations opening this July and August. Instead of large department store anchors, the group is betting on smaller formats placed closer to where customers actually live and shop.

This matters far beyond one clothing retailer. As I shared with my LinkedIn network recently, the leaders who scale successfully are usually the ones who build systems, structure and team capacity before growth arrives, not after. Retailability spent three years fixing the operating model before adding a single new store. Growth followed discipline, not the other way around.

What this means for retailers:

A smaller, well-run store in the right location can outperform a bigger one that is stretched thin.

Before opening a new branch or adding stock lines, test whether your current systems and team can actually support the extra load.

Community-based formats are becoming the format of choice for national retailers too, which means independents now compete with brands that used to only play in big malls.

CEO Takeaway: Growing bigger is not the same as growing stronger. The retailers who win the next few years will be the ones who fix the engine before they press the accelerator.

Full breakdown here:

https://businesstech.co.za/news/business/865671/south-african-retail-icon-opening-new-stores-after-escaping-business-rescue/

The headline numbers are actually improving. But retailers should read the detail, not just the direction.

Interest Rates Hold at 10.5%

Inflation Ticks Up to 4.5%

Stats SA data shows consumer inflation rose to 4.5% in May, up from 4.0% in April, the highest reading since July 2024. The jump was driven largely by fuel prices, which is a twist given that petrol and diesel have since dropped sharply from 1 July. Core inflation, excluding food and fuel, remains more contained.

Retail implication: Do not assume rising inflation automatically means weaker trading. This spike is fuel-driven and already reversing. Watch your own input costs rather than headline CPI, and price adjustments accordingly rather than reactively.

GDP Grows 0.5% in Q1, Beating Forecasts

Real GDP grew 0.5% quarter-on-quarter in Q1 2026, up from 0.4% in Q4 2025 and ahead of the 0.3% forecast, with annual growth moving close to 2%. Household consumption remains a soft spot even as overall output holds up.

Retail implication: The economy is not shrinking, it is just slow and uneven. Growth is coming from investment and exports more than household spending, so do not expect a broad consumer upswing. Plan for steady, not booming, foot traffic.

Fuel Relief Lands, With More Coming in August

Petrol dropped by roughly R1.96 to R2.00 a litre and diesel by more than R3.59 a litre from 1 July, as global oil prices eased. Early Central Energy Fund data points to a further drop of more than R2 a litre expected in August, which would mark the second consecutive month of relief.

Retail implication: Lower delivery and transport costs should start showing up in your margins within weeks, not just at the fuel pump. It also frees up a little more disposable income for customers. Two consecutive months of relief is the signal to watch before expecting any real lift in discretionary spending.

See full outlook:

https://iol.co.za/business/economy/2026-06-25-sp-trims-south-africa-growth-outlook-as-inflation-and-rate-pressures-build/

Kings Walk Mall — Pretoria East

Construction is officially underway on Kings Walk, a 32,000 square metre retail development on the corner of Solomon Mahlangu Drive and Bronkhorstspruit Road, east of Pretoria. The centre will be anchored by Pick n Pay, Shoprite, Boxer, Dis-Chem and Clicks, with 1,200 parking bays, and is scheduled to open in April 2027.

Retail implication: New mixed retail nodes like this bring national anchor tenants directly into growing residential suburbs. If you operate near a development like this, decide early whether you compete on convenience and specialism, or whether you position your store to benefit from the extra foot traffic the anchors will pull in.

Lowveld Mall — Hazyview, Mpumalanga

Lowveld Mall in Hazyview has completed a multi-million-rand redevelopment aimed at creating a more modern retail experience for the steady stream of tourists passing through on their way to the Kruger National Park area. The upgrade focused on layout, tenant mix and customer flow rather than simply adding more square metres.

Retail implication: Tourism-linked centres are investing in experience, not just extra floor space. If your store depends on passing trade, seasonal visitors or a nearby attraction, a similar refresh to layout and presentation can lift sales without needing more square metres.

CEO Takeaway: Developers are still spending big on physical retail, whether it is a brand new node like Kings Walk or a refresh like Lowveld Mall. Bricks and mortar retail is not shrinking, it is being redesigned around the customer.

The Corner Shop Is Becoming a Fintech Point

Payments network Pay@ has partnered with fintech platform Shop2Shop to open up more than 100,000 new bill payment points across South Africa, most of them informal traders and spaza shops. These small retailers can now let customers pay utility bills and other accounts in-store, earning commission on every transaction. It is part of a wider push, alongside a fast-growing buy-now-pay-later market, to bring formal financial services into township and informal retail.

For independent and informal retailers, this is a genuine new revenue line, not just a convenience for customers. A shop that also handles bill payments becomes a daily destination rather than an occasional stop, which pulls in footfall for the core business too. It also formalises trading history, which can help smaller operators access credit and supplier terms in future.

Buy Now, Pay Later Is Pushing for Regulation

South Africa’s buy-now-pay-later sector has grown quickly, and providers are now pushing for formal regulation rather than waiting for it to be imposed. Interestingly, most BNPL transactions are being funded through debit cards rather than credit, suggesting shoppers are using it more as a budgeting tool than a debt trap. Meanwhile, loyalty programmes remain heavily used, with the majority of South African consumers now active in at least one retailer scheme.

For independent retailers, both signals point the same way: customers want more flexible, lower-friction ways to pay, whether that is installments at checkout or a rewards programme that keeps them coming back. If you do not currently offer any form of instalment payment or simple loyalty mechanic, competitors who do are quietly winning the repeat customer.

More signals we are tracking:

https://www.retailbriefafrica.co.za/retail-management/shop2shop-and-pay-turn-the-corner-store-into-a-community-payment-centre/

50 — New community-format stores Edgars plans to open over the next two years, starting this July and August. Small formats are becoming the new growth engine.

32,000 — Square metres of new retail space coming to Pretoria East at Kings Walk Mall, anchored by five major grocery and health retailers.

100,000+ — New bill payment points created through the Pay@ and Shop2Shop partnership, turning spaza shops and informal traders into everyday financial service points.

A retailer in our network makes genuinely good product, but told us sales had plateaued for months. The issue was never the product. Customers simply did not know it existed beyond the people already walking past the store. As I posted on LinkedIn recently, great products fail every day not because they lack value, but because they lack visibility, and customers cannot buy what they do not know exists. The fix this retailer used was simple: posting three times a week showing the making of the product, the mistakes, and the customer stories, not just the finished item. Sales followed attention, not the other way around.

OPERATOR INSIGHT: TWO BETS ON WHERE THE CUSTOMER SHOPS NEXT

Edgars / Retailability (Retailer A)

After a three year turnaround, Edgars is opening 50 new next-generation community stores over the next two years, choosing smaller footprints in local suburbs over large department store anchors. Retailability is betting on proximity, lower overheads, and community relevance over scale.

Kings Walk Anchor Tenants (Retailer B)

Pick n Pay, Shoprite, Boxer, Dis-Chem and Clicks are all anchoring the new 32,000 square metre Kings Walk Mall in Pretoria East, betting that the growing residential population around it wants one large, convenient, one-stop destination rather than several smaller options.

Lesson learned: Neither strategy is right or wrong, they are simply different bets on where the customer wants to shop. An independent retailer cannot copy either at scale, but every store can choose its lane: be the closest, easiest, most personal option, or be genuinely worth the trip to a bigger destination. What both winners share is a clear point of view. As I shared on LinkedIn recently, the strongest brands are the ones that stand for something specific, and culture is not built through a mission statement on the wall, it is built through the small decisions a team makes every single day when nobody is watching.

How to apply this:

https://www.linkedin.com/posts/riad-laher-5b27571b_why-the-best-entrepreneurs-build-brands-that-activity-7479820188171988992-PXnU

RETAIL TECHNOLOGY SPOTLIGHT: ELECTRONIC SHELF LABELS

What it is: Digital price tags, usually e-paper displays, fitted to shelf edges and updated automatically from a central system instead of being printed and swapped by hand.

Best suited for: Retailers with frequent price changes, promotions, or a large number of SKUs across multiple aisles or branches.

Cost: Hardware and setup costs have fallen sharply in recent years, though it still requires upfront investment per shelf edge. Many suppliers now offer smaller pilot packages for a single department or category.

Retail use case: A store changes a promotional price across every branch from one central screen in seconds, instead of printing and manually swapping paper tags. This removes pricing errors at the till, a common source of customer complaints and lost trust.

Expected return: Fewer pricing disputes at checkout, faster promotion turnaround, and staff time freed from repricing shelves by hand. This is a capital investment decision, so weigh it against your current volume of price changes before committing.

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CLOSING THOUGHT

Right-sizing is not just a store strategy. It applies to how you run yourself as an operator. Most business owners spend on systems, consultants and technology, yet neglect the one asset that shapes every decision they make: themselves. Growth is a choice, and it usually starts before the business is ready to make it, not after.

The retailers who win from here will not always be the biggest. They will be the ones who fixed their systems, backed their team, and grew themselves before they grew their footprint.

Wa’alaikum Assalam,

The MYCOE Retail Matters Team

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