Fin24

Retail sales grow 4.2%

2012-09-19 14:22

Johannesburg - Growth in South Africa’s retail sales slowed to 4.2% year-on-year in July compared with a revised 8.6% in June, Statistics South Africa said on Wednesday.

On a monthly basis, sales were up by 0.1% in July and increased by 6.2% in the three months to July compared with the same period a year ago.

Economists polled by Reuters had expected year-on-year sales growth of 7.1% in July.

The retail sales data was based on a new sample drawn in April 2012, replacing previous sample drawn last year.

“Underlying retail sales is slowing but not overly fast, helped by unsecured credit growth and still-decent real disposable income growth.

“The number today probably won’t really unduly trouble the South African Reserve Bank and will be in line with their view of a steady slowdown in consumption,” said analyst Peter Attard Montalto.

Growth in sales averaged 6.1% last year compared with 5.1% in 2010.

Analysts expect sales to moderate this year as consumers cut down on non-essential spending as higher fuel and food costs bite. 

A 25% unemployment rate is also likely to hamper robust sales in retail stores. 

Consumer spending boosted economic growth in the third and fourth quarters of 2011 as demand-related sectors grew. The central bank cut interest rates to a 40-year low of 5% last month.


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