{"id":786834,"date":"2024-08-14T16:30:09","date_gmt":"2024-08-14T14:30:09","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=786834"},"modified":"2024-08-14T16:30:16","modified_gmt":"2024-08-14T14:30:16","slug":"good-news-for-retail-in-south-africa","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/finance\/786834\/good-news-for-retail-in-south-africa\/","title":{"rendered":"Good news for retail in South Africa"},"content":{"rendered":"\n

South African retail sales have seen another jump, exceeding expectations and sparking hope for the medium to long term in the sector.<\/p>\n\n\n\n

According to StatsSA, retail trade sales increased by 4.1% year-on-year (y\/y) in June 2024 following a 1.1% y\/y rise in May.<\/p>\n\n\n\n

This outcome was well above the Bloomberg consensus expectation of 1.0% y\/y.<\/p>\n\n\n\n

“This outcome means that volume sales rebounded from -0.3 q\/q in 1Q, to 1.5% q\/q in 2Q, implying that the retail industry will contribute positively to 2Q24 GDP growth,” said FNB Senior Economist Siphamandla Mkhwanazi.<\/p>\n\n\n\n

Chief Economist at Investec Annabel Bishop said that “some relief post-election also likely spurred spending on a peaceful, democratic election, and there was no shift to the left in the formation of the multi-coalition (GNU) government post-election.”<\/p>\n\n\n\n

Mkhwanazi echoed and furthered this, saying that this boost aligns with the cessation of load-shedding since March, a significant petrol price reduction in June, and improved sentiment following the election.<\/p>\n\n\n

\n
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Source: StatsSA<\/figcaption><\/figure><\/div>\n\n\n

The large leap in sales was greatly boosted by a 7.3% y\/y increase in general dealers\u2019 sales and a 6.1% y\/y rise in textiles, clothing, and footwear sales \u2013 the two most heavily weighted categories.<\/p>\n\n\n\n

The only other category that recorded annual growth was household appliances, furniture and equipment, at a lift of 1.8% y\/y, while sales of pharmaceutical, medical and cosmetic products were flat on the year.<\/p>\n\n\n\n

Sales of hardware, paint and glass fell -1.1% y\/y. Specialised stores selling food beverages and tobacco also reported a decline in sales of -1.5% y\/y.<\/p>\n\n\n\n

Meanwhile, shopping activity in pharmaceutical shops was unchanged compared to the same period last year.<\/p>\n\n\n\n

Retail trade sales increased by 2.0% in the second quarter of 2024 compared with the second quarter of 2023. The largest contributor to this increase was general dealers (3.2% and contributing 1.4 percentage points).<\/p>\n\n\n

\n
\"\"<\/a>
Source: StatsSA<\/figcaption><\/figure><\/div>\n\n\n

Looking at seasonally adjusted statistics, retail trade sales increased by 1.6% in June 2024 compared with May 2024, following month-on-month changes of -0.2% in May 2024 and 0.5% in April 2024.<\/p>\n\n\n\n

However, it still “fell by -0.1% m\/m in unadjusted terms, showing the outcome of 4.1% y\/y was boosted by particularly low statistical base effects,” explained Bishop.<\/p>\n\n\n\n

Seasonally adjusted retail trade sales increased by 1,5% in the second quarter of 2024 compared with Q1.<\/p>\n\n\n\n

The largest contributors to this increase were once again retailers in textiles, clothing, footwear and leather goods (3,2% and contributing 0,6 of a percentage point) and general dealers (1,1% and contributing 0,5 of a percentage point).<\/p>\n\n\n

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\"\"\/<\/figure><\/div>\n\n\n

Analysis<\/strong><\/p>\n\n\n\n

Mkhwanazi said that retail sales are up by 0.9% year-to-date compared to the same period last year.<\/p>\n\n\n\n

“Data suggests that these gains have all come from the last three months – which coincides with load-shedding cessation since March, a substantial petrol price cut in June, as well as the post-election improvement in sentiment,” said Mkhwanazi.<\/p>\n\n\n\n

The economist added that while June’s figures are encouraging, the broader consumer environment remains challenging due to high living costs, unemployment, and tight credit conditions.<\/p>\n\n\n\n

“The upcoming two-pot pension system is expected to have a limited impact on consumer spending, given concerns about rising debt distress,” said Mkhwanazi.<\/p>\n\n\n\n

“However, there is potential for an improved consumer backdrop in the medium term as inflation eases and interest rates gradually decline,” he added.<\/p>\n\n\n\n

\n\n\n\n

Read: South Africa\u2019s 30-year employment disaster<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

South African retail trade sales for June 2024 came in far higher than expected, painting a brighter picture for the economy in the second quarter of the year.<\/p>\n","protected":false},"author":101,"featured_media":717972,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11121],"tags":[1498,1210,5769],"class_list":["post-786834","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance","tag-investec","tag-retail","tag-statssa"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/786834","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=786834"}],"version-history":[{"count":8,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/786834\/revisions"}],"predecessor-version":[{"id":786895,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/786834\/revisions\/786895"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/717972"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=786834"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=786834"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=786834"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}