Retail sales growth half that forecast by economists
Though lower than expected, September’s retail sales were high enough to help boost the third quarter’s GDP
Muted growth in the retail sector may be enough to help steer SA out of a recession.
Despite headwinds to the consumer — including a VAT increase, weak household credit extension, depressed sentiment, and a mounting fuel-price burden — relatively benign inflation and interest rates helped growth in the sector.
September’s retail sales increased by a meagre 0.7% from the same month in 2017 — less than half the economists’ consensus of 1.9%, according to a poll by Bloomberg.
Statistics SA reported on Wednesday that furniture retailers recorded the best annual growth of 10.9% while hardware stores did worst with a 3.9% decline.
Following manufacturing and mining figures last week, the uptick in retail sales may help to save SA a recession when Statistics SA publishes its third-quarter GDP report next month. However, growth will likely remain low.
GDP contracted in the first and second quarters, placing the economy in recession for the first time in almost a decade. Economists define a recession as two consecutive quarters of GDP decline.
The three-months seasonally adjusted figure, used to calculate GDP, for September came to 1.5% compared to the previous quarter.
September’s total retail sales came to R84.6bn. In “constant prices” set to 2015, which Stats SA uses to strip inflation out of its sales growth figures, September’s retail sales amounted to R74.8bn.
General retailers enjoyed the biggest growth for the quarter, with sales rising 0.9% to R95.4bn in constant currency. Clothing retailers grew sales 2.8% to R36.6bn, and all other retailers grew sales 4.3% to R21.1bn.
Hardware, paint and glass suffered the biggest decline of 3.7% to R18.5bn.