Advertise with

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


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

Double-digit profit growth for Pick n Pay as turnaround plan pays off
22/10/2019 - 09:12
Pick n Pay has continued to reap the benefits of its turnaround strategy, positing double-digit profit growth in the six months to end-September after an intensive focus on supply costs.

Protecting retail investments with Uninterrupted Power Supply
22/10/2019 - 08:47
With the increasing dominance of retail chains, small and medium-sized retail businesses are struggling to stay competitive. To protect investments and remain in business, they have to consider all costs and thoroughly assess possible risks and related losses. For example, while it is common to forecast losses due to food spoilage, assessing problems caused by electricity failure is more complicated.

Better growth by investing in local shopping centres
21/10/2019 - 15:08
Millennials are driving massive evolution in retailing and, yes, we may be an emerging market, but it is a matter of time before these changes catch up with us.

One million customers sign up for Checkers Xtra Savings in the first week
21/10/2019 - 13:25
Checkers signed up the millionth customer to its new Xtra Savings programme, just a week following its launch on Monday 14 October.

The tug-of-war between physical and digital shopping
21/10/2019 - 10:59
In March of 2019, Soumen Ghosh, a visiting US professor of operations and supply chain management, delivered one of the business world’s more earth-shattering lectures on disruptive technologies at the Gordon Institute of Business Science in Johannesburg.