Do not count on South African retail sales keeping up the good run of 2016
Retail sales growth tends to be more cyclical than overall economic growth, outperforming the latter in good times, but often underperforming economic growth in tougher times. From 2010 to 2016, retail has had a good run, outperforming economic growth. However, we don’t bargain on this continuing in 2017. An expected period of retail "underperformance" could usher in a slowing in Retail Property capital growth to a rate where it is negative in real terms, implying some "correction". It has been a good growth period for retailers for much of the time since the end of the recession in mid-2009. Each year from 2010 to 2015, real retail sales growth has noticeably exceeded real economic growth, and with one month’s data left to be released it would appear that 2016 as a whole was another such year. However, the steady slowing in monthly real retail sales growth late last year, all the way from 4.3% year-on-year as at December 2015 to a 0.2% decline as at October 2016, suggests a likely ...
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