Cotton On says, Australia's no-frills chain stores in South Africa are key contributors to its revenue growth, thanks to the rising number of young consumers and ease of doing business in the country, once entry hurdles are cleared. According to Michael Hardwick, the firm’s global Chief Finance Officer, their South African operations have reported double-digit growth every month since opening its first store in 2011. He further stated that South Africa still rates as one of the hardest business to get established. However, it rates as one the company’s easiest business to operate once one has got through the regulatory establishment.

Over the next three years, Cotton On will double revenue in South Africa. The privately-owned company has an overall revenue growth target of 20 per cent year-on-year, which it has achieved for the past five years. Its planned expansion comes as South Africa's economic growth is forecast to stagnate this year while interest rates have risen by 200 basis points since early 2014, putting a tighter squeeze on consumer spending.

However, retail sales reached their strongest level in two years after rising 4.5 per cent year-on-year in May. People with jobs are buying more consumable goods and less durable goods such as motor vehicles the sales of which have dipped steadily since November when a small bounce was noticed.

Swedish multinational retail-clothing company H&M also plans to capitalize on retail growth by opening a further four stores this year bringing the countries footprint to nine stores in South Afric.