Retail spending up in December on stronger rand, says Mastercard
By Sunita Menon - Feb 12th, 09:56
Retail spending grew 3.8% in December on the back of the stronger rand and lower inflation, according to Mastercard.
Mastercard says this marked the strongest monthly performance for retail spending in SA since May 2013.
When including the effects of inflation, retail sales for December 2017 grew 7.5% year on year. Inflation contributed 3.7 percentage points to overall sales growth.
"This marks a significant deceleration in price inflation, bringing consumers much-needed relief over the holiday season," said Mastercard’s SpendingPulse, which reports on national retail sales. It is based on aggregate sales activity in the Mastercard payments’ network, coupled with survey-based estimates for certain other payment forms, such as by cash and cheque.
Senior vice-president of the group’s market insights Sarah Quinlan said: "The spike in consumer spending during the holiday season took retail sales to new highs. Sturdier GDP growth, a lower inflation outlook and the stronger rand, which drove down import prices — all benefited consumers over the holidays."
On Wednesday, Stats SA will release the retail sales figures for December. However, FNB economist Mamello Matikinca expects retail sales to moderate after a strong performance in November, propelled by Black Friday sales.
Retail sales saw its biggest jump since 2012 in November. The sector increased by a higher-than-expected 8.2% year on year in November 2017 (R94.67bn) after a 3.2% rise in October (R82.43bn).
Said Matikinca: "We expect to see a moderation in growth to approximately 3%, [because] consumers front-loaded purchases in December."
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