Data from Statistics South Africa (Stats SA) yesterday showed that retail trade sales rose by 0.8% year-on-year in May, up from a 0.7% increase in April, mainly driven by general dealers. | Ayanda Ndamane Independent Newspapers
SHOPPING activity has remained the hope for economic growth in the second quarter of 2024 as retail sales continued to accelerate in May after mining and manufacturing production failed to grow in the same month.
Data from Statistics South Africa (Stats SA) yesterday showed that retail trade sales rose by 0.8% year-on-year in May, up from a 0.7% increase in April, mainly driven by general dealers.
Stats SA’s deputy director for distributive trade statistics, Raquel Floris, said six of the seven retail groups registered a rise in sales, and general data, which includes supermarkets, drove much of the upward momentum, rising by 1.7% year-on-year.
Floris said sales rebounded for food, beverages and tobacco, and hardware, paint and glass.
In contrast, retail sales slowed for pharmaceuticals and medical goods, household furniture, appliances and equipment, and all other retailers while it shrank for textiles, clothing, footwear and leather goods.
“Retailers specialising in food and beverages and household goods also made notable positive contributions to overall growth in May,” Floris said.
“Textiles and clothing was the only retail group that recorded a weak month, declining by 4.5% year-on-year.”
This is supported by the results of the latest retail survey of the Bureau for Economic Research (BER), which revealed that confidence levels among semi-durable goods retailers fell markedly in the second quarter of 2024 – specifically it fell 30 points to 38.
Investec economist Lara Hodes said that, according to the BER’s retail survey, in contrast to sentiment among retailers in the semi-durable goods’ category, confidence among durable goods’ retailers (hardware and furniture) picked up.
The BER had said that confidence among hardware retailers more than tripled from 15% to 47%. For the first time in two years, it is close to the long-term average, as is the profitability index for this category of retailers.
“An improvement in electricity supply has benefited retailers, while inflation is on a downward trend, which has supported real incomes of consumers,” Hodes said.
According to BankservAfrica, “salaries adjusted for inflation tracked slightly higher at R14 015 in May – or 4.5% up on year-ago levels.
“We are anticipating a start to the interest rate-cutting cycle in November or the first quarter of 2025 (but await further guidance at today’s MPC meeting), which will ease the plight of the indebted and further support household consumption expenditure growth.”
On a month-to-month basis, seasonally adjusted retail trade sales decreased by 0.7% in May following month-to-month increases of 0.5% in April and 1.7% in March.
Retail trade sales increased by 1.3% in the three months ended May compared with the same three months last year, also driven by general dealers.
BUSINESS REPORT