Retail sales take a knock in South Africa – but relief is on the way

 ·20 Mar 2024

Retail sales are down, but the expected interest rate cuts in the second half of the year should support household consumption expenditure.

According to data from Stats SA, retail sales measured in real terms (constant 2019 prices) dropped by 2.1% year-on-year in January 2024.

The largest contributors to the decrease were:

  • Retailers in textiles, clothing, footwear and leather goods (-6.6% and contributing -1.2 percentage points);

  • Retailers in pharmaceuticals and medical goods, cosmetics and toiletries (-4.4% and contributing -0.4 of a percentage point); and

  • All ‘other’ retailers (-2.9% and contributing -0.4 of a percentage point).

Seasonally adjusted retail trade sales dropped by 3.2% from December 2023 to January 2024, following a month-on-month increase of 1.3% in December.

Retail trade sales did, however, increase by 0.4% in the three months ended January 2024, compared to the prior three months ended January 2023.

However, seasonally adjusted retail sales dropped by 0.3% in the three months ended January 2024 compared to the prior three months.

Confidence among retailers remains subdued, with the latest BER Q1.24 retail survey suggesting that only a third are satisfied with prevailing business conditions.

The BER said that the decline in retailer confidence could be due to poor profitability and the perceived risks around the upcoming national election.

BankservAfrica also noted that the nation’s severe ongoing economic challenges, including load shedding, logistics troubles, and geopolitical risks, have impacted the ability of companies to pay inflation-related salaries to employees.


However, Investec Economist Lara Hodes said that the SARB is projected to cut rates later this year.

This should provide the indebted with some relief and boost sentiment. boosting household consumption expenditure and, in turn, retail trade sales.

The BER also noted that lower levels of load shedding, moderating food inflation and interest rate cuts (pencilled in for July) should result in a more noticeable recovery in retail trade from Q3 2024 onwards.

Read: South Africans are in love with small shopping malls

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