The South

African trade

industryAn overview2012 – 2015

Dr Pali Lehohla

Stats SA

26 October 2017

Retail

Wholesale

Demographic

dividend

Motor trade

Accommodation

Food &

beverages

Detailed data for five divisions in trade are now available

• Large sample surveys

providing data for 2015

• Detailed statistics on:

• Income

• Commodities sold

• Concentration ratios

• Expenditure

• Profit margins

• Employment

• Capital expenditure

Trade

industry

The trade industry is responsible for 15% of SA economic production

Shares of

nominal GDP

2016

14,2%

15,0%

12,0%

12,5%

13,0%

13,5%

14,0%

14,5%

15,0%

15,5%

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

The trade industry contribution to GDP has grown slightly over the years

Income

The trade industry generated R3,17 trillion in income during 2015

1,13

1,331,49

1,56

2,39

3,17

0,00

0,50

1,00

1,50

2,00

2,50

3,00

3,50

2005 2006 2007 2009 2012 2015

R t

rilli

on

That’s just over R100 000 generated per second!

Wholesale52%

Retail26%

Motor trade19%

Food & beverages

2%

Accommodation1%

Wholesale trade generated just over half of total income in 2015

Total income

R3,17 trillion

Percentages have been rounded and may not sum to 100% Only includes formal business activities

R2 106 025m (66%)

R392 234m (12%)

R674 071m (21%)

0

500 000

1 000 000

1 500 000

2 000 000

2 500 000

Large enterprises Medium enterprises Small and micro enterprises

R m

illio

nLarge enterprises generated two-thirds of the R3,17 trillion in income

2015

Building material & hardware

32%

Machinery & equipment

22%

Food & beverages

19%

Other27%

What are the most popular sources of income in each industry (2015)?

Wholesale

Food & beverages

42%

Clothing16%

Medical & cosmetics

11%

Other32%

Retail

New vehicles

33%

Fuel29%

Parts18%

Used vehicles

17%

Other4%

Motor*

Food and snacks

81%

Non-alcoholic drinks

9%

Wines5%

Other5%

Food & beveragesAccommodation

*New and used vehicles includes both retail and wholesale sales

Cape Town14%

Johannesburg14%

Tshwane9%

eThekwini7%

Other districts51%

49%

Accommodation: almost half of available rooms* are in five cities

Eku-

Rhuleni

4%

*The unit of accommodation available to be charged out to guests; for example, a powered site in a caravan park or a room in a hotel.

Motor trade: vehicle sales* – number of units sold in 2012 and 2015

*Only includes retail sales; excludes wholesale sales of vehicles

Total: 412 819 Total: 384 860 Total: 412 964 Total: 378 499

Concentration

ratios

What do concentration ratios tell us?

If an industry is dominated by

a few large players, then it’s

regarded as monopolistic.

This can hinder competition

and present a barrier to new

entrants into the market

Proportion of income earned by the top 10 largest enterprises

Retail and accommodation are dominated by a few large companies

15%

15%

21%

38%

42%

0% 20% 40% 60% 80% 100%

Food & beverages

Wholesale

Motor

Accommodation

Retail

The motor trade industry has become less concentrated over time

Proportion of income earned by the top 10 largest enterprises

33%26% 23% 21%

0%

20%

40%

60%

80%

100%

2006 2009 2012 2015

And so has accommodation

Proportion of income earned by the top 10 largest enterprises

55%50%

44%38%

0%

20%

40%

60%

80%

100%

2007 2009 2012 2015

Concentration in retail trade, however, has increased over time

Proportion of income earned by the top 10 largest enterprises

39% 40% 41% 42%

0%

20%

40%

60%

80%

100%

2005 2009 2012 2015

Expenditure

A total of R3,09 trillion was spent by the trade industries in 2015

Wholesale52%

Retail26%

Motor19%

Food & beverages

2%

Accommodation1%

Total expenditure

R3,09 trillion

Percentages have been rounded and may not sum to 100%

What did each division spend money on?

17%

50%

85%

75%

83%

24%

20%

7%

10%

6%

58%

30%

9%

16%

11%

0% 20% 40% 60% 80% 100%

Accommodation

Food & beverages

Motor

Retail

Wholesale

Purchases Employment costs Other expenditure

Profit margin

The profit margin rose in 2015 to 2,6%

1,8%1,9% 1,9%

1,6%

2,6%

0,0%

0,5%

1,0%

1,5%

2,0%

2,5%

3,0%

2011 2012 2013 2014 2015

Pro

fit m

arg

in

Profit margin for the entire trade industry (net loss/profit after tax as a percentage of turnover)

Casino income contributed to accommodation’s high profit margin

Profit margin (net loss/profit after tax)

2,0%

2,0%

2,5%

2,6%

2,9%

9,9%

0,0% 2,0% 4,0% 6,0% 8,0% 10,0% 12,0%

Motor trade

Food and beverages

Wholesale trade

All trades

Retail trade

Accommodation

In fact, casinos contribute just over a third of total accommodation income

Accommodation 59%

Casino facilities

34%

Functions 4%

Other services

3%

2015

Employment

Photo: http://www.mediaclub.co.za, Chris Kirchhoff

The trade industry is the third largest employer in the formal business sector

Community services

27%

Business services

23%

Trade 22%

Manufacturing 12%

Other16%

Source: Quarterly Employment Statistics (QES), June 2017 (Table B)

The trade industry employed 1,9 million people in 2015

0,3 millionNumber of jobs

1

2

Retail – 44% (812 104 people)

3

4

5

Retail is the largest employer in the trade industry (2015)

Wholesale – 26% (490 037 people)

Motor – 15% (270 440 people)

Food & beverages – 9% (174 601 people)

Accommodation – 6% (109 196 people)

1

2

3

4

5

1,9 million

people

28%

34%

56%

57%

59%

47%

72%

66%

44%

43%

41%

53%

0% 20% 40% 60% 80% 100%

Motor

Wholesale

Accommodation

Retail

Food & beverages

All trades

Female Male

Female employees outnumber male employees in three divisions

2015

But employees in those three divisions earn the lowest salaries

Average income for all employees

R 174 135

R 126 151

R 84 380R 87 852

R 47 037

R 202 823

R 146 905

R 93 632 R 91 716

R 60 761

R 0

R 50 000

R 100 000

R 150 000

R 200 000

R 250 000

Wholesale Motor Retail Accommodation Food & beverages

2012

2015

Income vs employment (2015)

52%

26%

19%

2% 1%

26%

44%

15%

9%

6%

0%

10%

20%

30%

40%

50%

60%

Wholesale trade Retail trade industry Motor trade industry Food and beverages Accommodation

Income Employment

Income vs employment: large enterprises (2015)

70,3% 70,1%67,0%

61,7%

41,3%

50,6%

66,0%

40,3% 40,0% 39,3%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Accommodation Retail Wholesale Motor Food & beverages

Income Employment

Capital

expenditure

Wholesale39%

Retail32%

Motor15%

Food & beverages

4%

Accommodation11%

Wholesale spend the most on acquiring new assets (2015)

Total capital

expenditure

R49,9 billion

Thank you