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Cape Town - The latest retail trade statistics could indicate a less optimistic outlook for the year ahead, with anticipated tightening of lending criteria, little to no job creation, rising inflation and consequently, interest rate hikes, according to Jason Muscat, FNB's senior industry economist.
In December 2015 retail trade sales increased by 4.1% year-on-year (y/y), Statistics SA announced on Wednesday.
The highest annual growth rates were recorded for retailers in household furniture, appliances and equipment (7.7%) and textiles, clothing, footwear and leather goods (6.5%).
The main contributors to the 4.1% increase were general dealers - contributing 1.8 percentage points - and retailers in textiles, clothing, footwear and leather goods (contributing 1.5 percentage points.
Measured in real terms - that is in terms of constant 2012 prices - retail trade sales increased by 3.3% in 2015 compared with 2014. The main contributors to this increase were general dealers (3.2% and contributing 1.3 percentage points) and retailers in textiles, clothing, footwear and leather goods (4.3% and contributing 0.9 of a percentage point).
Seasonally adjusted retail trade sales decreased by 0.9% month-on-month in December 2015. This followed month-on-month changes of 2.4% in November 2015 and 0.4% in October 2015. In the fourth quarter of 2015, seasonally adjusted retail trade sales increased by 1.3% compared with the previous quarter.
Retail trade sales increased by 3.8% in the fourth quarter of 2015 compared with the fourth quarter of 2014. The main contributors to this increase were general dealers (4.2% and contributing 1.6 percentage points) and retailers in textiles, clothing, footwear and leather goods (5.7% and contributing 1.2 percentage points).
According to Muscat, the "robust" trade sales acceleration of 4.1% y/y underscores the relative resilience of the South African consumer, but is slightly flattered by the lower base of December 2014.
"Shoppers seemingly kept tills ringing at clothing and furniture retailers. The furniture number was the first expansion for the sector in five months, likely aided by slightly faster credit growth and spending in anticipation of bonuses," said Muscat.
"Consumers appear to be switching their purchasing habits to general dealers, who typically have lower inflation given the scale of their buying power."
He said with retailers making a significant contribution to gross domestic product (GDP), the full year number will be supportive of the overall GDP growth rate for 2015.
Strong retail sales growth is unlikely to be sustained in 2016, according to the Nedbank Economic Unit.
"The outlook for consumer spending is poor on the back drop of deteriorating confidence, lower growth in real disposable income, as well as higher inflation and interest rates," the unit said in reaction to the latest retail trade sales announcement.
"General economic conditions remain poor. However, we anticipate that the Monetary Policy Committee (MPC) will remain focused on the upside risks to inflation and continue raising the repo rate during 2016."
