Skip to main content

Black Friday windfall for retail sales

| Economic factors

Black Friday helped provide a surprise boost to November retail sales, which grew an unexpected 3.8% year on year.

The marketing gimmick helped lift retail sales by 3.5% from October to November. Economists had predicted a 0.4% contraction.

First National Bank senior economic analyst Jason Muscat said on Wednesday: "The contraction in October, followed by a bumper print in November suggests consumers delayed purchases in the first month of the [fourth] quarter in order to take advantage of Black Friday deals in November.

"The likelihood of this being the … driver of the revival is given credence by the 3.5% … jump from October."

Positive contributors were general dealers, which recorded a 4.7% rise in sales and hardware, and pharma retailers expanded, documenting sales growth of 5.4% and 4.9% respectively. However, food and beverage sales moderated to 2.7%, from 5.1% in October.

Economists expect the positive November retail sales to bring some recovery to the fourth-quarter GDP

Constrained spending by consumers saw furniture sales contracting 0.8% year on year.

Clothing retailers were unable to lift sales in the period, citing a tighter credit climate.

Muscat said further fiscal tightening by the Treasury and tax increases would erode consumers’ spending power.

"There is unlikely to be any interest rate relief for consumers given the sticky inflation numbers," he said.

Economists expect the positive November retail sales to bring some recovery to the fourth-quarter GDP.

Investec economist Kamilla Kaplan said high unemployment, weak real disposable income growth and depressed consumer confidence had put a damper on spending.

She said December sales were expected to be muted.

Kaplan said a retail survey by the Bureau for Economic Research showed that "retail volume growth will likely measure below 1.5% during the fourth quarter. Survey respondents expected little improvement heading into 2017."

Stanlib chief economist Kevin Lings said the retail sector had shown resilience compared to manufacturing and mining.

This was because household income growth had outpaced inflation because of above-inflation wage increases in key sectors of the economy.

Pin It

Related Articles

By: Vernon Pillay – IOL Business The proposed Value Added Tax (VAT) increase is set to significantly affect grocery bills for many South Africans; however, there are specific items you can include in your trolley that will remain exempt from t…
By: Dr Velenkosini Matsebula – IOL Business The South African government has once again turned to taxation as a means of addressing its fiscal challenges, announcing an increase in the value-added tax (VAT) rate by half a percentage point in 2…
In a bid to bring real relief to households battling rising costs, The SPAR Group is putting R1 billion back into the pockets of South African consumers through its SPAR Rewards programme. With the cost of living at an all-time high, these savi…
By: Dhivana Rajgopaul – IOL Business With the rising cost of living, South African consumers will be looking at different ways to save money, including the retailers that have the cheapest grocery baskets.
By: Staff Reporter - IOL IN a significant move aimed at improving workers' livelihoods across South Africa, the government announced that a new minimum wage will come into effect on March 1. This change is expected to impact a wide range of industr…