Retail sales exceeded expectations in December – but the strain on households and consumer spending is clear.
The retail industry in South Africa exceeded expectations for the tail end of 2023 – but low consumer demand continues to plague the sector.showed that retail trade sales in South Africa increased by 2.7% year-on-year in December 2023 – a stronger result than analysts’ projections of a 0.7% decline.Retailers in textiles, clothing, footwear and leather goods ;On a month-on-month basis, volumes increased by 1.4%.
Additionally, volumes saw a year-on-year increase of 6% from the 45 million transactions in December 2022. These figures suggest that the average spend per purchase has risen from R580 to R1,048.However, quarterly adjusted retail trade sales decreased by 0.4% compared with the third quarter of 2023, with FNB senior economist Siphamandla Mkhwanazi saying that this implies “that the retail industry will detract from the 4Q23 GDP growth.
“The muted shopping activity in 4Q23 is consistent with sentiment indicators in consumer-facing sectors, which predicted weakening demand into the 2023 festive season,” said Mkhwanazi., “reflecting a subdued consumer demand environment,” said Mkhwanazi. As such, six of the seven types of retailers showed negative year-on-year growth rates over this period. The largest negative contributor to the year’s retail trade sales was general dealers .
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