Johannesburg - Retail sales grew by 1% year-on-year (y/y) in March after a revised 1.3% contraction in February, Statistics SA said on Wednesday.
March's figure brought an end to 13 consecutive months of annual contraction.
The figure was also higher than market expectations of 0.4% y/y.
Nedbank Group economists said all the major sectors, except general dealers, hardware, paint and glass and other categories recorded strong growth over the month.
"Retail sales should remain firm during the remainder of 2010 as consumer confidence picks up gradually on lower interest rates and inflation as well as some stabilisation in the job market."
However, Nedbank said the 25% electricity tariff increase and high household debt would partly contain the pace of the recovery in retail sales.
"Today's retail sales numbers are encouraging and support the view that domestic demand is gradually improving."
- Sapa