Consumers are ringing in the holiday season with a solid start to retail sales, according to Mastercard SpendingPulse, which looks at overall retail spending trends across all payment types.
October – South Africa’s third biggest month for retail spending after December and November – saw retail sales rise 1.1% over the same month in 2017 when the effects of inflation are removed.
Including the effects of inflation, retail sales rose 3.9% year-over-year, as consumer prices ticked up slightly in October amidst higher oil prices.
Retail sales climbed 2.8% between January and October after adjusting for inflation – a substantial improvement from the 1.4% pace seen for the same period in 2017.
“Retail performance in 2018 shows that South Africa’s consumer has recovered from the lows of 2016 and 2017,” said Warren Zambelli, principal Advisors division lead at Mastercard.
“Since October, oil prices have fallen sharply, helping to ease price pressure in the near term, benefitting consumers as they enter into the festive season shopping period.”
For a third straight month, apparel remained the top performing sector of those tracked by SpendingPulse, with October sales rising 2.7% over 2017 after adjusting for inflation.
For retailers selling pharmaceuticals, medical goods, toiletries, and cosmetics, growth in sales continue to outperform total retail with sales up 2.2% over October 2017 when the effects of inflation are removed.
November has been driving a larger share of annual retail spending in South Africa each year since Mastercard SpendingPulse started tracking retails sales in 2012.
Last year retail sales surpassed 9.4% growth for the month over 2016, as Black Friday discounts and the growth of eCommerce spurred early festive season shopping.