South Africa’s real retail sales rose to a 12,3% year-on-year (y/y) increase in December after increasing by a revised 11,1% y/y (original estimate was a 12,6% y/y increase) in November, following October’s record revised 12,9% y/y (original estimate was 12,8% y/y) in October, Statistics South Africa said on Wednesday.
This brought real retail sales growth for 2004 to 10,3% compared with 4,9% in 2003 and 2,3% in 2002. Stats SA said previously that real retail sales grew by 5,7% in 2003 compared with 2002’s 4,5% increase.
This was only the seventh time in 2004 that the y/y increase has been in double digits after a 10,6% y/y rise in January, an 11,3% y/y increase in February, 11,1% y/y in July and 11,9% y/y in September. The current time series started in January 1998.
The South African Reserve Bank (SARB) implemented a 150 basis points cut in interest rates in mid-June 2003, which was the first cut in South African interest rates since September 2001.
There was a further 100 basis points cut in mid-August, another 100 basis points cut in mid-September, a 150 basis points cut in October and a 50 basis points cut in mid-December. In 2004, the SARB cut rates by 50 basis points in August.
South Africa’s festive season retail sales in the fourth quarter, which covers the Christian Christmas season, as well as the Hindu Diwali festival, the Muslim Eid festival and the Jewish Hanukkah festival, are expected to be the best in at least 20 years according to a survey of feastive season retail trends by Ernest & Young that was conducted among 500 retailers by the Bureau for Economic Research (BER) at the University of Stellenbosch.
Retail sales were expected to grow by 17,4% y/y in the fourth quarter 2004
compared with 10,2% y/y in the festive season of 2003, which reflected volume growth of 11,7% y/y compared with 8% y/y in 2003. The Stats SA data show that nominal sales grew by 15,9% y/y in the fourth quarter, while real sales growth was 12,1% y/y. – I-Net Bridge