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Inflation is out of the Reserve Banks control, no amount of further interest rate increases are going to help get the rate back within the targeted range! So the South African consumer is going to be under more and more pressure when it comes to discretionary spending. This will translate into retail sales declining.

In Richard Branson’s autobiography he advocates, “Spend your way out of the tough times” In marketing, you would be committing business suicide right now by cutting your marketing and advertising spend!

This is not the time to be cutting costs, by not continuing to open and or revamp stores!

Retailers right now should be aggressively rolling out new stores and concepts in these tough times! There is going to be consolidation and retraction across all the retail sectors.

Only retailers with strong balance sheets and cash flows are going to come out of this cycle stronger!

Retailers need to be cutting costs on all the unnecessary things that we tend to think we need in the good times. Not cutting costs on your core competencies, which is selling products to consumers and that involves opening and revamping stores.

So if you current strategy is cutting back on the above. Then you may as well get out of retail and get into resources, if you can stomach Eskom.    

The current downturn in the South African economy will reverse it’s just a case of when.