Picture: BLOOMBERG
Picture: BLOOMBERG

Retail sales growth slowed marginally in October on revised figures, reaching the lowest level in seven months, according to Stats SA data released on Wednesday.  

Annual growth in retail sales slowed from a revised 0.4% in September to 0.3% in October, coming in below expectations.

A Bloomberg poll of nine economists had forecast growth of 0.6%. On a month-on-month, seasonally adjusted basis, retail sales contracted 0.2%.

The industry has faced a tough year as consumers have been confronted with poor domestic economic growth, rising unemployment and slower wage growth. This has hurt retail stocks — with the JSE’s general retailers index experiencing its worst performance in two decades — as companies battle tough trading conditions

Household consumption spending, which accounts for about two-thirds of GDP, grew just 0.2% in the third quarter, when SA’s economy contracted.

Banks and payment providers noted an increase in transaction activity on Black Friday, on November 29, which could provide a once-off boost for the sector.

However, some economists warn that the onset of severe power cuts by Eskom at the start of the week could affect festive season trade, an important period for the industry.

For the year to date, retail sales figures have recorded growth of 1.3% compared with growth of 2.2% that the sector managed during 2018.

donnellyl@businesslive.co.za