{"id":751766,"date":"2024-02-14T17:04:35","date_gmt":"2024-02-14T15:04:35","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=751766"},"modified":"2024-02-14T17:04:41","modified_gmt":"2024-02-14T15:04:41","slug":"big-surprise-for-retailers-in-south-africa-but-consumers-still-feel-the-pain","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business\/751766\/big-surprise-for-retailers-in-south-africa-but-consumers-still-feel-the-pain\/","title":{"rendered":"Big surprise for retailers in South Africa &#8211; but consumers still feel the pain"},"content":{"rendered":"\n<p>The retail industry in South Africa exceeded expectations for the tail end of 2023 &#8211; but low consumer demand continues to plague the sector.<\/p>\n\n\n\n<p>The latest <a href=\"https:\/\/www.statssa.gov.za\/publications\/P62421\/P62421December2023.pdf\" data-type=\"link\" data-id=\"https:\/\/www.statssa.gov.za\/publications\/P62421\/P62421December2023.pdf\" target=\"_blank\" rel=\"noreferrer noopener\">data from StatsSA<\/a> showed that retail trade sales in South Africa increased by 2.7% year-on-year (y\/y) in December 2023 &#8211; a stronger result than analysts&#8217; projections of a 0.7% decline.<\/p>\n\n\n\n<p>The largest contributors to this increase were:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Retailers in&nbsp;textiles, clothing, footwear and leather goods&nbsp;(7.0% and contributing 1.6 percentage points);<\/li>\n\n\n\n<li>General dealers (3.5% and contributing 1.5 percentage points).<\/li>\n<\/ul>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full\"><a  data-lightbox=\"post-image\" href=\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2024\/02\/image-47.png\"><img loading=\"lazy\" decoding=\"async\" width=\"696\" height=\"129\" src=\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2024\/02\/image-47.png\" alt=\"\" class=\"wp-image-751808\" srcset=\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2024\/02\/image-47.png 696w, https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2024\/02\/image-47-300x56.png 300w\" sizes=\"auto, (max-width: 696px) 100vw, 696px\" \/><\/a><figcaption class=\"wp-element-caption\">Source: StatsSA<\/figcaption><\/figure><\/div>\n\n\n<p>On a month-on-month basis, volumes increased by 1.4%. BankservAfrica said that robust \u201csales were reflected over the traditionally busy December shopping season.&#8221;<\/p>\n\n\n\n<p>Investec economist Lara Hodes said that card spending increased to almost double its value at R50 billion, with 47 million card transactions in December 2023. This is compared to R26 billion spent in the same period in 2022. <\/p>\n\n\n\n<p>Additionally, volumes saw a year-on-year increase of 6% from the 45 million transactions in December 2022. These figures suggest that the average spend per purchase has risen from R580 to R1,048.<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full is-resized\"><a  data-lightbox=\"post-image\" href=\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2024\/02\/image-48.png\"><img loading=\"lazy\" decoding=\"async\" width=\"703\" height=\"402\" src=\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2024\/02\/image-48.png\" alt=\"\" class=\"wp-image-751812\" style=\"width:549px;height:auto\" srcset=\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2024\/02\/image-48.png 703w, https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2024\/02\/image-48-300x172.png 300w\" sizes=\"auto, (max-width: 703px) 100vw, 703px\" \/><\/a><figcaption class=\"wp-element-caption\">Source: StatsSA<\/figcaption><\/figure><\/div>\n\n\n<p>However, quarterly adjusted retail trade sales decreased by 0.4% compared with the third quarter of 2023, with FNB senior economist Siphamandla Mkhwanazi saying that this implies &#8220;that the retail industry will detract from the 4Q23 GDP growth.&#8221; <\/p>\n\n\n\n<p>Retail trade sales increased by a flat 0.1% in the fourth quarter of 2023 compared with the fourth quarter of 2022.\u00a0<\/p>\n\n\n\n<p>&#8220;The muted shopping activity in 4Q23 is consistent with sentiment indicators in consumer-facing sectors, which predicted weakening demand into the 2023 festive season,&#8221; said Mkhwanazi.<\/p>\n\n\n\n<p>Overall, r<strong>etail trade sales decreased by 1.0% in 2023 compared with 2022<\/strong>, &#8220;reflecting a subdued consumer demand environment,&#8221; said Mkhwanazi. <\/p>\n\n\n\n<p>&#8220;We expect this to persist in the near term, driven by sticky inflation, high interest rates and depressed consumer confidence,&#8221; he added.<\/p>\n\n\n\n<p>As such, six of the seven types of retailers showed negative year-on-year growth rates over this period. The largest negative contributor to the year&#8217;s retail trade sales was general dealers (-2.4% and contributing -1.0 percentage point). <\/p>\n\n\n\n<p>Conversely, the only positive contributor was retailers in textiles, clothing, footwear and leather goods (5.7% and contributing 1.0 percentage point).<\/p>\n\n\n\n<p><strong>Analysis<\/strong><\/p>\n\n\n\n<p>Hodes, said that despite December\u2019s result, overall consumers remain largely constrained as they grapple with lacklustre real incomes. <\/p>\n\n\n\n<p>&#8220;Average real take-home pay declined by 4.7% y\/y in 2023&#8230; persistent \u201ceconomic challenges have hampered companies\u2019 ability to pay inflation-related salary increases over the past 18-24 months,\u201d said Hodes. <\/p>\n\n\n\n<p>Mkhwanazi sees the short-to-longer term outlook as brighter, as different measures that have been put in place &#8220;should help support spending on discretionary items [which] should see household consumption expenditure lift from the estimated 0.8% y\/y in 2023, to around 1.5% in 2024.&#8221;<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><strong>Read: <a href=\"https:\/\/businesstech.co.za\/news\/business\/751372\/mining-production-rises-slightly-but-remains-below-expectations\/\" data-type=\"link\" data-id=\"https:\/\/businesstech.co.za\/news\/business\/751372\/mining-production-rises-slightly-but-remains-below-expectations\/\">Mining production rises slightly, but remains below expectations<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Retail sales exceeded expectations in December &#8211; but the strain on households and consumer spending is clear.<\/p>\n","protected":false},"author":101,"featured_media":614105,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9872],"tags":[1210,19125,5769],"class_list":["post-751766","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-retail","tag-south-african-retail","tag-statssa"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/751766","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/101"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=751766"}],"version-history":[{"count":5,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/751766\/revisions"}],"predecessor-version":[{"id":751842,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/751766\/revisions\/751842"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/614105"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=751766"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=751766"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=751766"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}