Cautious SA consumers are spending more on pharma goods, Mastercard survey shows
South Africans spent less on food and more on pharmaceuticals in April, according to credit and debit card issuer Mastercard.
Mastercard released its monthly SpendingPulse survey for April shortly before Statistics SA was scheduled to release is retail sales figures for April at 1pm.
Mastercard’s data showed annual spending growth of 3.7% in April from the same month in 2017, with an average annual inflation of 2.7 percentage points stripped out.
Its figure is lower than the expected figure from Statistics SA of 4.1%, a slowdown of March’s 4.8% when sales were boosted by people shopping ahead of the increase in value-added tax (VAT) to 15%.
If inflation is not stripped out, Mastercard said total retail sales grew 6.4%.
"Pharmaceutical, medical goods, cosmetics and toiletry sales excluding the effects of inflation increased by 5.7% year on year in April, while sales including the effects of inflation were up 9.1%. Higher prices contributed 3.4 percentage points sales growth in the sector," Mastercard said in a media release.
Its survey found that general dealer sales volume experienced its decline in sales in more than a year, once inflation was stripped out.
"Sales volumes excluding inflation declined 2.7% year on year, and sales including inflation increased 4.3%. Sales were helped by a decline in food inflation, but economic factors such as high unemployment and lack of growth in wages hit this sector harder than others."
Inflation contributed just 2.7 percentage points to total retail sales — the lowest inflation contribution since Mastercard’s SpendingPulse measurement began.
"While optimism was very high last quarter, the South African consumer is currently in a wait-and-see mode, and has compartmentalised their spending with certain sectors like pharmaceuticals, medical goods, cosmetics and toiletries seeing an uptick in spend, with others like general dealers declining versus a year ago," Mastercard senior vice-president of market insights Sarah Quinlan said in the media release.
"Though there has been a moderation of inflationary pressures in many economic sectors, other factors like high unemployment and low wage growth continue to restrain spending."