Retail sales growth slows down
Retails sales grew by a muted 2% year-on-year in July, Statistics SA said on Wednesday, down from the previous month’s 2.4%.
The outcome was well below market expectations of 2.6%, and reflects a still-constrained consumer environment, according to economists.
The largest annual growth rate was achieved by so-called “other” retailers — which includes the likes of online retailers — which saw a rise of 7.9%. Retailers in pharmaceuticals and medical goods, cosmetics and toiletries grew by 3.7%, while retailers in textiles, clothing, footwear and leather goods, as well as those in household furniture and appliances, grew 3.2%.
Consumers remain “under quite a bit of pressure in terms of their real disposable income”, which is being eroded by high taxes, electricity prices and worry over retrenchments among low-income earners, said Sanisha Packirisamy, economist at Momentum Investments.
“The year-to-date retail sales growth continues to depict a muted demand environment,” said FNB economist Siphamandla Mkhwanazi.
The persistently low retail readings remain below consumer price inflation levels, which have averaged 2.4% year to date, revealing the difficulty retailers are having passing costs onto consumers, he said in a note.