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Retail sales rise unlikely to be sustained - bank

Jan 20 2016 14:09
Carin Smith

Cape Town - Measured in real terms, retail trade sales increased by 3.9% year-on-year in November 2015, Statistics SA announced on Wednesday.

According to Nedbank's economic unit, this increase is more than expected, beating the consensus forecast of 2.9% and higher than 3.4% in October.

Seasonally adjusted retail trade sales increased by 2.5% month-on-month in November 2015. According to Nedbank, this is the strongest monthly increase since June 2012. Statistics SA said this followed month-on-month changes of 0.4% in October 2015 and -1.5% in September 2015. In the three months ended November 2015, seasonally adjusted retail trade sales rose by 0.9% compared with the previous three months.

The main contributors to the increase were general dealers (contributing 1.9 percentage points) and retailers in textiles, clothing, footwear and leather goods (contributing 1.2 percentage points).

The highest positive annual growth rates were recorded for all "other" retailers (7%), retailers in textiles, clothing, footwear and leather goods (5.8%) and retailers in pharmaceuticals and medical goods, cosmetics and toiletries (5.6%).

Retail trade sales rose by 3.5% in the three months ended November 2015 compared with the three months ended November 2014. The main contributors to this increase were general dealers (4.1%, contributing 1.6 percentage points) and retailers in textiles, clothing, footwear and leather goods (5.5%, contributing 1.1 percentage points).

Nedbank cautioned that strong retail sales growth is unlikely to be sustained in the months ahead.

"Consumer spending will be dragged down by weak confidence and lower growth in real disposable income, as well as higher inflation and interest rates," said the bank.

"General economic conditions remain poor. However, we anticipate that the monetary policy committee (MPC) [of the South African Reserve Bank] will remain focused on the upside risks to inflation and continue raising the repo rate during the first half of 2016."

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statistics sa  |  sa economy  |  retail

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