Johannesburg. – South Africa’s retail trade sales as measured in real terms (constant 2012 prices) increased by 2,3 percent year-on-year in September. The figure, released by Statistics SA yesterday, was below market expectations but above a revised 2 percent expansion in August. Economists polled by Reuters had forecast retail sales would increase by 2,8 percent compared with the same month last year.
Retail sales are an important indicator of consumer spending in the economy and fall within a sector that makes up 12,5 percent of gross domestic product.
Many households are battling to make ends meet, with a moderation in income growth, the curbing of rampant unsecured credit growth, debt and a rise in the cost of living impacting consumer spending.
The MBD Consumer Financial Vulnerability Index, also released yesterday, showed that about 73 percent of South African consumers did not feel in control of their financial situation in the third quarter of 2014.
The index found that consumers felt mildly exposed in terms of the sufficiency of their income, savings and expenditure but remained very exposed concerning their debt servicing situation.
Commenting on yesterday’s retail sales data for September, Rand Merchant Bank economists said in a note that “pent-up demand” following a strike by metals and engineering workers in July, an improvement in household credit demand and a decline in food inflation were some of the factors that probably supported consumer spending in September.
General dealers were the main contributors to the increase, contributing 0,8 of a percentage point, followed by retailers in hardware, paint and glass who contributed 0,5 of a percentage point.
Seasonally adjusted retail trade sales fell by 0,8 percent in September following month-on-month increases of 0,5 percent in August and 1,2 percent in July.
Seasonally adjusted retail trade sales increased by 0,9 percent in the third quarter of 2014 compared with the previous quarter.
Sales rose by 2,2 percent in the third quarter of 2014 compared with the third quarter of 2013, with the main contributor being general dealers. – Businessday/Sapa.