Advertise with fastmoving.co.za
 
 

Retail sales grew 2.4% in April year-on-year, twice the rate expected.
Retail sales grew 2.4% in April year-on-year, twice the rate expected.

Retail sales jump in April, giving hope of avoiding a recession

ECONOMIC NEWS

By Karl Gernetzky - Jun 12th, 15:44

SA’s retail sales jumped 2.4% in April, led by clothing retailers, adding to hopes that a technical recession may be avoided in the second quarter. 

SA’s retail sales jumped 2.4% in April, led by clothing retailers, adding to hopes that a technical recession may be avoided in the second quarter.

Retail sales grew at twice the rate expected in the Bloomberg consensus, with Statistics SA’s release on Wednesday coming after data on Tuesday showed manufacturing jumped 4.6% in April, the fastest pace in three years.

The retail sector is an important indicator of consumer spending, which drives growth in the economy as it accounts for just more than 60% of GDP.

Retailers in the textiles, clothing and footwear sector led the gains, Stats SA said, with sales growing 6.4% year-on-year. Retail sales in the pharmaceuticals and cosmetics category grew 5.3%.

Seasonally adjusted retail sales increased 0.8% in April month-on-month, rebounding from a 0.7% contraction month-on-month in March.

Retail trade sales increased by 1.3% in the three months ended April 2019 compared with the three months ended April 2018.

The uptick in sales could be attributed to increased shopping activity during the Easter holidays, as well as base effects from the March load-shedding, which subdued shopping activity, FNB economist Siphamandla Mkhwanazi said in a note.

“While the April print is a welcome development, pressure on consumers’ discretionary income, via weaker labour markets and higher income taxes, is expected to keep shopping activity relatively muted this year,” Mkhwanazi said. A Reserve Bank interest-rate cut in July, however, could help boost activity.

April is the first month of the second quarter and focus will now shift to mining data on Thursday. The Bloomberg consensus is for a 0.5% contraction in mining output in April year-on-year.

SA’s economy shrank 3.2% in the first quarter of the year, hit by load-shedding, although economists expect activity to pick up a little as 2019 proceeds.

The retail sales figures, along with manufacturing data on Tuesday, have boosted the chance that SA has avoided a recession, although general conditions remain subdued, Nedbank Group Economic Unit economists Dennis Dykes and Johannes Khosa said in a note.

“The weak economic climate, downward surprises to inflation and expectations of lower global interest rates in the short term make an early easing by the Reserve Bank more likely,” the economists said.Business Live 

Read more about: sa economy | retailers | retail sales | retail

Related News

Checkers brings world-class retail to Constantia with new flagship store
27/11/2019 - 13:01
Checkers has opened the doors to its state-of-the-art 2 330 m² flagship supermarket at the Constantia Emporium as the retailer continues to take innovation to new heights.

Woolworths carves out market share in SA
27/11/2019 - 10:11
In Australia, David Jones's sales declined 2.1%, with the company saying a store refurbishment contributed to the decline.

Push and pull strategies work together to keep consumers coming back for more
26/11/2019 - 10:20
The retail sector is under increasing pressure as consumers have shrinking disposable income in a strained economy. Maintaining share of wallet is critical. Relying solely on a push route to market strategy from manufacturers into retailers is not enough to get consumers buying products. A pull strategy needs to coexist with the push to drive brand consumption. Integrating these strategies requires intelligent and insightful decision-making. This, in turn, requires data generated through smart technology which provides line of sight across the value chain from manufacturer to distribution, retailer to the consumer.

SA expected to sow fewer maize hectares than in previous seasons
26/11/2019 - 10:06
South African farmers are expected to sow 2.8% fewer hectares of the food staple maize next season than forecast in October after the planting season was delayed by rains, a Reuters survey of analysts showed.

Exclusive leases must fall: Commission cracks whip on Shoprite, Pick n pay, Spar, Woolies
26/11/2019 - 09:57
The Competition Commission Inquiry into Grocery Retail, published on Monday, called for an end to the exclusive leases negotiated by national retail chains in all shopping malls across the country in a bid to open up access to markets for smaller players.