Retail growth slips below CPI as SA Shoppers cut back

• Shopping-centre trading density grew 4.6% year-on-year in Q2, slipping 0.4 percentage points below June CPI.
• Super-regional centres remained strongest, while Gauteng led trading-density growth across South Africa's three major provinces.
• Consumers are “value engineering” spending, cutting costs without completely abandoning lifestyle, experiences and smaller luxuries.

Consumers are spending more selectively as shopping-centre growth loses some of its inflation-beating momentum.

SA retail remains resilient, but the consumer is changing

‍South Africa's shopping-centre sector remained in positive territory during the second quarter of 2026, but trading-density and rental growth lost some momentum as inflation and household financial pressure reshaped consumer spending.

The latest Clur Shopping Centre Index shows that growth in key retail-property performance measures slipped below inflation during the quarter, interrupting an inflation-beating trend that had been evident since late 2024.

The Index covers more than 5.4 million square metres of shopping-centre space across listed and unlisted property funds in South Africa and Namibia, providing an important indicator of retail-property and consumer performance.

For property investors, the numbers suggest a market that remains resilient but is becoming increasingly dependent on how consumers allocate increasingly stretched disposable income.

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“The trend of ongoing resilient positive growth continued across the board, along with an encouragingly stable rent-to-sales level,” says Belinda Clur, founder of the Clur Collective and managing director of Clur International.

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However, she says that resilience was insufficient to keep pace with inflation during May and June.

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“This marks an important inflection point, as the market trend had been reassuringly inflation-beating since October 2024.”

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The numbers investors should watch

‍The national Clur Index for All Centres ended Q2 at an annualised trading density of R43,612/m²

• Trading-density growth: was +4.6% year-on-year. That was 0.4 percentage points below June CPI of 5%.
• Below CPI: May was particularly significant, marking the first time since September 2024 that trading-density growth had fallen below CPI. Despite that slowdown, the performance across shopping-centre formats was far from uniform.
• Super-regional centres: Led growth at 5.1%, followed by regional centres at 4.6% and community and smaller centres at 4.4%. Super-regionals were also the only format to outperform June CPI on trading-density growth, albeit marginally.
• Super-regionals: R53,643/m² remained dominant in absolute trading-density terms
• Community and smaller centres: R49,523/m² that continued an established pattern in which very large and smaller convenience-orientated centres have produced some of the strongest trading-density volumes.

Gauteng leads growth, but Western Cape commands spend

‍There is also an interesting divergence emerging provincially.

• Gauteng recorded the strongest trading-density growth at 5.0%, having overtaken the Western Cape earlier this year.
• Western Cape followed at 4.5%, with KwaZulu-Natal at 4.1%.

But when measured by the actual value of trading density, the picture changes.

• Western Cape: R50,629/m²
• KwaZulu-Natal: R45,353/m²
• Gauteng: R42,178/m²

So while Gauteng is currently producing the fastest growth, Western Cape shopping centres continue to generate the highest trading-density volumes of the three major provinces. That distinction matters to investors assessing not simply growth rates, but the underlying productivity of retail space.

Rental growth is also feeling the pressure

‍The national base rental level ended the quarter at R248.69/m², representing annual growth of 4.8% also slightly below June CPI.

• Importantly, the national base rent-to-sales ratio remained stable at 6.6%, continuing the relatively balanced level established around mid-2024.
• That stability provides an important counterpoint to the softer growth numbers.
• Retail sales growth may be slowing relative to inflation, but the relationship between rents and tenant turnover has not deteriorated sharply.
• For landlords and REIT investors, that is a metric worth watching closely in the coming quarters.

The rise of the value-engineering consumer

‍Perhaps the most important message from the Q2 Index is not contained in a rental or trading-density number at all. It is the changing behaviour of the South African consumer.

Clur describes households as increasingly engaging in “value engineering” finding ways to reduce expenditure while attempting to preserve their quality of life. 

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“The financial affordability re-set sees a high level of strategic value engineering across the market, as consumers seek clever ways to cut costs whilst maintaining, or even improving, their quality of life.”

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That behaviour extends well beyond groceries and utilities. Consumers are reassessing spending across apparel, home, travel, transport and experiences. But this does not necessarily mean eliminating discretionary spending altogether.

Instead, Clur sees evidence of consumers continuing to seek smaller luxuries, experiences and purchases that provide an emotional reward, even while larger household budgets remain under pressure. This creates an important challenge for shopping-centre owners and retailers.

The consumer hasn't stopped spending. They're becoming more selective about where, how and why they spend.

What does it mean for retail-property investors?

‍The Q2 numbers don't point towards a retail-property crisis. They point towards a more demanding operating environment.

Positive trading-density growth, stable rent-to-sales levels and continued strength among major shopping-centre formats indicate resilience.

But growth slipping below inflation means investors should increasingly interrogate the quality of that growth.

• Which centres are gaining market share?
• Which tenant categories are benefiting from value-conscious spending?
• Where can landlords still achieve sustainable rental growth?
• And which shopping centres are successfully adapting their tenant mix, experiences and positioning to a consumer who wants value without completely sacrificing lifestyle?

Those questions become increasingly important if household finances remain constrained.

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