African trade industry An overview 2012 2015 Dr Pali Lehohla - PowerPoint PPT Presentation

The South African trade industry An overview 2012 – 2015 Dr Pali Lehohla Stats SA 26 October 2017

Detailed data for five divisions in trade are now available Motor trade Retail • Accommodation Large sample surveys providing data for 2015 • Detailed statistics on: • Income Food & • Commodities sold Wholesale beverages • Concentration ratios Trade Demographic • Expenditure dividend industry • Profit margins • Employment • Capital expenditure

The trade industry is responsible for 15% of SA economic production Shares of nominal GDP 2016

The trade industry contribution to GDP has grown slightly over the years 15,5% 15,0% 15,0% 14,5% 14,2% 14,0% 13,5% 13,0% 12,5% 12,0% 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Income

The trade industry generated R3,17 trillion in income during 2015 That’s just over R100 000 generated per second! 3,50 3,17 3,00 2,39 2,50 R trillion 2,00 1,56 1,49 1,50 1,33 1,13 1,00 0,50 0,00 2005 2006 2007 2009 2012 2015

Wholesale trade generated just over half of total income in 2015 Food & Accommodation beverages 1% 2% Motor trade 19% Total income Wholesale R3,17 trillion 52% Retail 26% Percentages have been rounded and may not sum to 100% Only includes formal business activities

Large enterprises generated two-thirds of the R3,17 trillion in income 2015 2 500 000 R2 106 025m (66%) 2 000 000 1 500 000 R million 1 000 000 R674 071m (21%) R392 234m 500 000 (12%) 0 Large enterprises Medium enterprises Small and micro enterprises

What are the most popular sources of income in each industry (2015)? Retail Motor* Wholesale Other 4% Used Building vehicles Other Other material & New 17% 27% Food & 32% hardware vehicles beverages 32% 33% 42% Parts 18% Food & Medical & Machinery & beverages Fuel cosmetics equipment Clothing 19% 29% 11% 22% 16% Accommodation Food & beverages Non-alcoholic drinks 9% Food and Wines snacks 5% 81% Other 5% *New and used vehicles includes both retail and wholesale sales

Accommodation: almost half of available rooms* are in five cities Cape Town 14% Johannesburg 49% 14% Other districts 51% Tshwane 9% eThekwini 7% 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 Total: 412 819 Total: 384 860 Total: 412 964 Total: 378 499 *Only includes retail sales; excludes wholesale sales of vehicles

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 Retail 42% Accommodation 38% Motor 21% Wholesale 15% Food & beverages 15% 0% 20% 40% 60% 80% 100%

The motor trade industry has become less concentrated over time Proportion of income earned by the top 10 largest enterprises 100% 80% 60% 40% 20% 33% 26% 23% 21% 0% 2006 2009 2012 2015

And so has accommodation Proportion of income earned by the top 10 largest enterprises 100% 80% 60% 40% 55% 50% 44% 20% 38% 0% 2007 2009 2012 2015

Concentration in retail trade, however, has increased over time Proportion of income earned by the top 10 largest enterprises 100% 80% 60% 40% 42% 41% 40% 20% 39% 0% 2005 2009 2012 2015

Expenditure

A total of R3,09 trillion was spent by the trade industries in 2015 Food & Accommodation beverages 1% 2% Motor 19% Total expenditure R3,09 trillion Wholesale 52% Retail 26% Percentages have been rounded and may not sum to 100%

What did each division spend money on? Purchases Employment costs Other expenditure Wholesale 83% 6% 11% Retail 75% 10% 16% Motor 85% 7% 9% Food & beverages 50% 20% 30% Accommodation 17% 24% 58% 0% 20% 40% 60% 80% 100%

Profit margin

The profit margin rose in 2015 to 2,6% 3,0% Profit margin for the entire trade industry 2,6% (net loss/profit after tax as a percentage of turnover) 2,5% 1,9% 1,9% 2,0% 1,8% Profit margin 1,6% 1,5% 1,0% 0,5% 0,0% 2011 2012 2013 2014 2015

Casino income contributed to accommodation’s high profit margin Profit margin (net loss/profit after tax) 9,9% Accommodation Retail trade 2,9% All trades 2,6% 2,5% Wholesale trade Food and beverages 2,0% Motor trade 2,0% 0,0% 2,0% 4,0% 6,0% 8,0% 10,0% 12,0%

In fact, casinos contribute just over a third of total accommodation income 2015 Accommodation Other 59% services 3% Functions Casino 4% facilities 34%

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

The trade industry is the third largest employer in the formal business sector Other 16% Community services 27% Manufacturing 12% Business Trade services 22% 23% Source: Quarterly Employment Statistics (QES), June 2017 (Table B)

The trade industry employed 1,9 million people in 2015 Number of jobs 0,3 million

Retail is the largest employer in the trade industry (2015) 5 Retail – 44% (812 104 people) 4 1 Wholesale – 26% (490 037 people) 2 3 1 Motor – 15% (270 440 people) 3 1,9 million Food & beverages – 9% (174 601 people) people 4 Accommodation – 6% (109 196 people) 5 2

Female employees outnumber male employees in three divisions 2015 Female Male All trades 47% 53% Food & beverages 59% 41% Retail 57% 43% Accommodation 56% 44% Wholesale 34% 66% Motor 28% 72% 0% 20% 40% 60% 80% 100%

But employees in those three divisions earn the lowest salaries Average income for all employees R 250 000 R 202 823 R 200 000 2012 R 174 135 2015 R 146 905 R 150 000 R 126 151 R 100 000 R 93 632 R 91 716 R 87 852 R 84 380 R 60 761 R 47 037 R 50 000 R 0 Wholesale Motor Retail Accommodation Food & beverages

Income vs employment (2015) 60% 52% 50% 44% 40% 30% 26% 26% 19% 20% 15% 9% 10% 6% 2% 1% 0% Wholesale trade Retail trade industry Motor trade industry Food and beverages Accommodation Income Employment

Income vs employment: large enterprises (2015) 80% 70,3% 70,1% 70% 67,0% 66,0% 61,7% 60% 50,6% 50% 41,3% 40,3% 40,0% 39,3% 40% 30% 20% 10% 0% Accommodation Retail Wholesale Motor Food & beverages Income Employment

Capital expenditure

Wholesale spend the most on acquiring new assets (2015) Food & beverages 4% Accommodation 11% Motor Total capital Wholesale 15% 39% expenditure R49,9 billion Retail 32%

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