Share

Black Friday provides boost for SA retail sales

Johannesburg – Following a short-lived boost, retail sales may slow down in the first half of 2017 because of increased consumer pressures in the coming months, say analysts.

Annual retail sales were up by 3.8% in November 2016, according to data released by Statistics South Africa (Stats SA) on Wednesday.

Black Friday helped boost sales growth by 3.5% from October 2016, explained Jason Muscat, FNB senior economic analyst. This contrasts from the -0.6% decline in sales from September to October.

The highest annual growths were recorded for retailers in hardware, paint and glass (5.4%); pharmaceuticals and medical goods and cosmetics and toiletries (4.9%); and general dealers (4.7%).

General dealers were the main contributor to the 3.8% sales growth, with two percentage points.

However clothing sales disappointed, by increasing 1.9% over the past year. This is mainly owing to stricter lending criteria and negative credit extension growth, explained Muscat. Furniture, appliances and equipment is also the only sector that contracted, with annual sales growth at -0.8%.

“We expect that the revival in the month will be short-lived,” said Muscat.

December sales are expected to disappoint due to the pre-December buying brought on by Black Friday. The 6.8% inflation recorded for December also may reflect subdued consumer spending.

READ: Inflation soars to 6.8% in December

“While we anticipate slightly higher household consumption growth levels in 2017, there is unlikely to be any interest rate relief for consumers given the sticky inflation numbers,” he said.

In a statement, chief economist at Stanlib, Kevin Lings, said that the combination of the higher inflation rate, weaker consumer confidence, higher utility prices, higher unemployment, fuel price hikes, higher interest rates, and possible tax hikes in February may add pressure to consumer spending in coming months. 

He added that the latest annual growth rate was above market expectations for a decline of 0.4%. Inflation was noticeably higher in 2016, the reserve bank continued to hike rates in the early part of the year and banks were stricter in granting credit.

“The net result is that the consumer has less discretionary income available for general retail activity,” he said.

Consumer confidence versus consumer spending

Read Fin24's top stories trending on Twitter:

We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
19.04
-0.7%
Rand - Pound
23.98
-0.4%
Rand - Euro
20.53
-0.3%
Rand - Aus dollar
12.36
-0.1%
Rand - Yen
0.13
-0.7%
Platinum
894.10
-0.3%
Palladium
996.00
-0.6%
Gold
2,194.02
-0.0%
Silver
24.42
-0.9%
Brent Crude
86.09
-0.2%
Top 40
67,905
+0.3%
All Share
74,106
+0.3%
Resource 10
56,200
+1.0%
Industrial 25
103,604
+0.3%
Financial 15
16,488
-0.2%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders