Consumers continue their festive-season spend trend in January
By Sunita Menon - Mar 16th 2018, 13:55
For the first time in five years, consumer spending in January grew at the same pace as during the festive season, signifying economic recovery.
This is according to the Mastercard SpendingPulse report, released on Thursday. The report, which provides a macroeconomic analysis of retail spending trends in SA, showed that consumers started 2018 on a stronger footing amid a downward trend in the inflation rate.
Consumer spending in January climbed 3.8% year on year, after accounting for the effects of inflation.This is the same pace of growth the retail industry saw during the December peak season, which was also the strongest monthly performance since May 2013.
When the effects of inflation are included, retail sales for January 2018 grew 7.3% year on year.
"January retail sales show an improvement in consumer discretionary spending, with South Africans benefiting from a moderation in inflation, a stronger rand and some recovery in industries such as agriculture, as production recovers from the severe drought," commented Sarah Quinlan, senior vice-president and group head of market insights for Mastercard.
"With 2017’s GDP growth exceeding expectations at 1.3% and improved business confidence, we are seeing a healthier economic outlook with a possibility of stronger wage and employment growth in the months to come."<./i>
However, despite the improvements in consumer spending, the general-dealer sector — which includes food and other day-to-day essentials — has continued to underperform for a 13th consecutive month, with inflation-adjusted sales declining 1.2% year on year.
Next week, Statistics SA will release the retail sales figures for January, which is expected to show another strong performance, namely an increase of 6% compared to the same period a year ago.
Retail trade sales increased 5.6% in the fourth quarter of 2017. December’s figure of 5.3% brought the annual retail sales growth for 2017 to 3%, an improvement from 2016’s 1.7% but not a full recovery to 2015’s 3.3%.
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