It’s the nightmare before Christmas. SA’s retailers — many of which have put out awful trading updates — are gearing up for what looks to be a dreadful festive trading season. The ability and willingness of consumers to spend has tapered off this year, with higher taxes and interest rates, weak growth in real disposable incomes and muted rates of credit depressing consumer confidence. In the year to date, the general retailers index is down 17.8%, with clothing, furniture and household equipment retailers experiencing meaningful volume declines. Food retailers have fared better, with volumes holding up or showing small declines, says Sasfin Securities senior equity analyst, Alec Abraham. On the positive side, there appears to be a buying opportunity now that retail shares have been sold down aggressively. Says Abraham: "One could argue they appear relatively cheap, though one must consider whether or not historic p:e levels are still relevant in a retail market that now includes for...
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