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Analysts say pain will go on for general retailers

| Economic factors

General retailers are likely to end the year with a whimper, having taken some bruising hits during 2016. Furthermore, there is little evidence to indicate that the new year will bring good news as the ills plaguing the retailers would not have materially changed by 2017.

Stanlib chief economist Kevin Lings said the economy had lost momentum over the past two years and remained at risk of slipping into a recession.

"The South African economy has been hurt by a broad-based slowdown in most sectors of the economy for a variety of reasons, both internally and externally. It is understandable that business and consumer confidence remains extremely weak," he said.

Weak growth in real disposable income, coupled with higher interest rates and new credit regulations, had suppressed consumers’ ability and willingness to spend. General retailers, which largely sell nonessential goods, had been hardest hit. Food retailers had fared better as demand for their products was less discretionary, said Electus Fund Managers equity analyst Damon Buss.


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