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Cape Town - The consumer's purse will be only about 3% fatter this year because leaner salary increases than in 2009 are expected - together with an increase in personal tax and rises in petrol and electricity prices.
In a report on prospective retail sales for 2010, Cadiz Securities said consumers are expected to have only R30.7bn more in their purses.
This is half what they received last year.
A model is used to predict the rise in household income so as to estimate retail sales.
According to Cadiz analysts Shamil Ismail and Jasmine Lin, this year's salary increases will be modest because of the still-suffering labour market and moderate inflation.
Average increases of 6.1% can be expected.
Ismail reckons salary increases are the most important contributor to consumers' financial viability. Cadiz believes that this year's modest salary increases will result in a poorer year for retailers.
The asset manager also expects the petrol price to rise by 12% in rand terms.
If Eskom's electricity tariff increases by 35%, the consumer's purse should shrink by another R7.6bn.
Cadiz further believes personal income tax will rise this year and extract another R10.4bn from consumers.
- Sake24.com
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