South Africa has a major shopping mall problem

Nearly half of South Africa’s lowest-income households lack access to a mall within 5 km, a major retail access gap compared to affluent areas, presenting an opportunity for retailers to develop more locally focused shopping formats.

Analysis from Lightstone Retail’s data reveals an important insight into mall access in South Africa: 46% of the lowest-income households do not have access to a mall within 5 km of their homes.

To ensure consistency, Lightstone’s study defined eligible centres as malls anchored by a grocery store.

The organisation’s findings highlight a stark access gap for lower-income communities alongside a concentration of choice among affluent households.

“Consumer behaviour has shifted since Covid, and the data is telling a very clear story about proximity and everyday value,” said Lightstone Retail managing director Mohit Narotam.

“When almost half of the lowest-income households lack a grocery-anchored mall within 5 km, it changes how and where people shop.”

According to Narotam, businesses that read this signal correctly can reshape format, tenant mix, and service models to meet real-world access constraints.

By contrast, higher-income households are well-served by malls. More than 70% of the highest-income group have access to at least 11 grocery-anchored malls within 5 km of their homes, and 95% have at least one.

The imbalance is even sharper for large-format centres. Less than 2% of the lowest-income households live within 5 km of a super-regional mall, sized over 80,000 m², compared with 40% of the highest-income households.

While investment in large malls tracks high economic activity, the access gap points to untapped demand closer to lower-income households.

Historical retail investments in underserved areas prove just how successful it can be to tap into these gaps.

For example, Maponya Mall, which Richard Maponya opened in 2007 in Soweto, has become an economically viable staple of the township.

At the time, this investment, worth R650 million, was the largest that Soweto had ever seen. Before the mall opened, Maponya’s idea had been critiqued heavily by those who didn’t believe it could be a success.

“I fought for 27 years for that mall and was many times denied; they actually thought I was dreaming. When Nelson Mandela cut the ribbon to open the mall, that was the highlight of my life,” he said, as reported by Daily Maverick.

Room for growth

Lightstone acknowledged that this challenge is not uniform. In some cases, low-income households are spread out in non-dense pockets, making new mall investment difficult to justify.

Yet there are also many areas where population density is high enough to support viable new formats. In addition, even where local malls exist, lower-income consumers often allocate only a portion of their spending locally, while substantial portions flow elsewhere.

Analysis clearly highlights the ‘chicken-and-egg’ aspect to this market. Since they are generally not well served locally, the market is forced into out-of-area shopping.

Lightstone pointed out that this behaviour will shift as different services and brands start better serving the market.

These are dense markets, with significant spending potential – more than enough to sustain stores if the node is generally well-served enough to encourage in-area spending.

The solution is likely to be driven by the right mix of tenants in new shopping formats in the local vicinity, with well-thought-out collaborations across retailers to make this work.

“This is a product and format innovation brief hiding in plain sight,” said Lightstone Retail’s head of product and innovation, Tamaryn Shalom.

“Retailers can explore right-sized convenience options, price-tiered ranges and last-mile services that bring essentials within reach for lower-income shoppers.“

In addition, Shalom explained that figuring out which complementary services make a local offering viable will also boost interest.

“Whether those needs are currently met by informal outlets or not, there is room for formal retail to design for access first, then compete on value,” she said.

“The opportunity is to meet people where they live, not ask them to travel further or pay more.”