Skip to main content

SA’s September retail sales recover slightly

| Economic factors

South Africa's retail sales recovered according to data on Wednesday, halting a slide from a likely contraction although some sectors revealed consumers remained under pressure as economic growth slowed.

Retail sales grew 1.4 percent year-on-year in September, marginally higher than expectations of 1 percent from a Reuters forecast, with food sales growing the fastest but, crucially, continued contractions in sales of clothing and household items.

“It is clear that households are battling to shake off the effects of higher inflation and interest rates, both of which are still being acutely felt,” said senior analyst at First National Bank Jason Muscat.

The South African Reserve Bank (SARB) has raised rates cumulatively by 200 basis points since early 2014, but looks set keep them on hold again at next Thursday's policy meeting as economic growth continues to stumble.

Sales of furniture, appliances and equipment contracted by 3.8 percent, a sixth consecutive month of contractions. Clothing sales shrunk 1.5 percent.

The slump mirrored a slowdown in household spend on durable goods, which the central bank in September said had contracted for a sixth consecutive quarter, citing low consumer confidence and poor employment prospects.

Household consumption makes up about 50 percent of gross domestic product in Africa's most industrialised country, but with the economic growth forecast at 0.5 percent by the Treasury, analysts warned of a contraction after a surprise 1.2 percent expansion in the second quarter.

“The retail sales data caps the releases we've seen so far pointing to Q3 growth faltering again,” said chief Africa analyst at Standard Charted Razia Khan, adding that she expected the central bank to keep a hold on its tightening cycle.


Pin It

Related Articles

By: Shaun Jacobs – Daily Investor Major changes are coming to VAT in South Africa, with the government looking to expand the range of food items exempt from the tax. 
By: Hanno Labuschagne - MyBroadband An anticipated strengthening of the rand and slipping global oil prices could result in lower petrol prices at the pumps next month.
By: Myles Illidge - MyBroadband Eskom has asked the National Energy Regulator of South Africa (Nersa) for a 36.15% electricity tariff hike for the customers it directly supplies and charges, Daily Maverick reports.
By: Yogashen Pillay – The Mercury Economists are predicting a big drop in petrol and diesel prices next month, saying it will bring much-needed relief to under-pressure consumers.
By: Jason Woosey - IOL Petrol and diesel prices are set to come down from Wednesday, June 5, according to a statement released by the Department of Mineral Resources and Energy (DMRE).