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Retail Trade of Furniture and Appliances in South Africa 2015

  • November 2015
  • 94 pages
  • Who Owns Whom
Report ID: 3630068


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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.

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.

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