Shopping Malls in South Africa will now be able to open up space to smaller and more diverse retailers.
Over 2,000 shopping malls and retail centres in South Africa are in for a major shake-up as retail group Spar joins Pick n Pay and Shoprite in bringing an end to long-term exclusive lease agreements.The consent agreement follows a mediation process where the Spar Group committed to ending exclusive leases by December 2026 and to opening opportunities to Small, Medium, And Micro Enterprises and Historically Disadvantaged Persons-owned supermarkets immediately.
As more than 50% of grocery shopping journeys are to malls and convenience centres, collectively these leases prevented competition for most consumer purchases. In its final report published on 17 December 2019, the GRMI concluded that long-term exclusive lease agreements limit consumer choice within shopping centres, sustain concentration levels, pose particular barriers to participation by SMEs and HDPs, and hinder dynamism and innovation in the grocery retail sector.
“In respect of Spar Group head leases for stores owned by Spar retail members, the Spar Group will cease enforcing exclusivity against SMEs, HDP specialist stores and HDP supermarkets with immediate effect.”The Spar Group will not include exclusivity provisions in any new head leases and will cease to enforce exclusivity against all competitors by December 2026.
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