Retail sector in worse shape than expected
Sales growth slowed more sharply than expected, with sales at general dealers shrinking
Retail trade sales growth slowed more sharply than expected in July, coming in at 1.8% year on year, from June’s 2.9% and against expectations of between 2.4% and 2.7%.
The retail sector is an important indicator of consumer spending, a key driver of growth in the economy.
June’s figure was the strongest since November 2016 and a moderation had been expected, but the outcome was worse than expected.
Sales of food, beverages and tobacco in specialised stores rose 7.1%, with household furniture, appliances and equipment up 6.8% from a year earlier, the main positive forces in the July reading.
General dealers fell 0.6%, and hardware, paint and glass dropped 2.1%.
After a strong performance in the second quarter, FNB and Investec economists predicted marginal growth at the start of the third quarter but anticipated growth to slow during the course of the year.
Investec economist Kamilla Kaplan said ahead of the release: "Constraining factors to the growth in household consumption expenditure include persistently depressed consumer confidence, high unemployment and relatively weak income growth."
Retail sales shrank 0.6% in July from June.