Retail sector shows a glimmer of growth
By Sunita Menon - Oct 17th 2018, 13:32
Retailers surprised economists in August, with annual sales growth of 2.5% — far higher than the consensus 0.3%.
In current prices, total retail sales in August came to R86.7bn, up from July’s R82.2bn, Statistics SA reported.
Stats SA sets prices to 2015 levels to strip inflation out of its retail sales figures. At constant 2015 prices, August’s retail sales came to R76.8bn.
Of the seven types of retailers Stats SA segments its report into, furniture stores enjoyed the fastest annual sales growth at 10.4%, followed by clothes shops which grew sales 6%. Only hardware stores suffered a sales decline, with their contribution falling 2%.
The three-month, seasonally adjusted average for retail came to 0.5%, indicating the sector will help SA’s third-quarter GDP recover from declines in the first and second quarters.
The retail sector is an important indicator of consumer spending, which drives growth in the economy. The sector has been knocked hard in recent months by a weaker rand and higher oil price, which has cut into disposable income.
Growth in the sector in the third quarter so far is a stark contrast to the weak performance in the second quarter of the year, which contributed to SA’s descent into a recession for the first time since the global financial crisis.
Investec expected August’s figure to moderate to about 0.5% year-on-year, in line with the Bureau of Economic Research’s (BER) third-quarter retail survey, which suggests that “business conditions in the retail sector remained constrained during the third quarter”.
“Specifically, muted sentiment levels, coupled with higher consumer and personal income taxes, lacklustre household credit extension and mounting fuel price pressure, continue to weigh on disposable income,” said Investec economist Lara Hodes.
FNB chief economist Mamello Matikinca expected a slight increase in August as concluded public-sector wage settlements and back pay supported consumption.
A Bloomberg survey of economists expected a 0.1% contraction year-on-year and a 0.8% contraction on a month-on-month basis.
Alibaba beats analyst estimates as recommendations boost sales
17/05/2019 - 09:38
The Alibaba Group posted quarterly revenue and earnings that topped analyst estimates as personalised recommendations drive consumer spending across its shopping sites.
Contraction in economy looms in the first quarter
17/05/2019 - 09:16
Weak performances in the retail, mining and manufacturing sectors, which bore the brunt of the most severe power cuts the country has experienced yet, indicates that the economy contracted in the first quarter of the year.
Richemont lifts dividend 5% as online platforms boost sales
17/05/2019 - 08:52
Richemont chair John Rupert says group sales rose 27%, 'reflecting growth across all business areas and distribution channels.'
Taking stock of fashion's $210bn inventory problem
16/05/2019 - 11:08
Fashion retailers are faced with a dilemma: to keep up with the demands of 'fast fashion' they need rapid stock turnover. But what do they do with the surplus?
Retail sector barely budged in March
16/05/2019 - 09:54
Consumers were under pressure in March with a 74c/l hike in the petrol price and slightly higher inflation.