Advertise with fastmoving.co.za
 
 

The retail sector recorded a second consecutive month of growth in the third quarter.
The retail sector recorded a second consecutive month of growth in the third quarter.

Retail sector shows a glimmer of growth

ECONOMIC NEWS

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.

Business Live 

Related News

Shoprite Group helps waiter become an entrepreneur thanks to his unique product offering
18/03/2019 - 15:02
Phenyo Sebaeng (28) had to borrow money from two of his close friends in order to buy a bus ticket from Rustenburg to Cape Town, where he had secured a meeting with a buyer at the Shoprite Group's home office in January 2017.

520+ million Smart Shopper cash-off discounts to be issued for customers
18/03/2019 - 11:49
Pick n Pay’s Smart Shopper will give customers double personalised discounts to help them save even more in the next few weeks.

Three quarters in a row of sales growth for H&M
15/03/2019 - 14:26
Sweden’s H&M, the world’s second-biggest fashion retailer, posted local-currency sales growth for its fiscal first quarter that matched analysts’ forecasts, on Friday, while net sales were slightly higher than expected.

Manufacturing growth far lower than expected
14/03/2019 - 15:46
The manufacturing sector saw tepid growth at the start of 2019.

Libstar banks on new food products
14/03/2019 - 10:15
Consumer goods manufacturer and distributor Libstar, whose brands include Lancewood cheese and Denny Mushrooms, says it adjusted to the slowdown in consumer spending by launching hundreds of new food products.