Retail sales dropped in March, Statistics SA said on Wednesday.
Sales at constant prices decreased an annual 5,3% compared to a revised contraction of 4,4% in February, the Pretoria-based agency said.
”The figure is very weak but not a surprise,” said Nedbank economist Nicky Weimar.
She said the consumer’s income was falling because asset prices were falling.
”The consumer has a perception of being poorer and is more cautious about spending.
”Remember that the consumer still has debt burdens, although this will become easier with the interest rate cuts,” Weimar said.
However, she noted, the most important concern was unemployment.
”Unemployment is still rising and clearly households feel very insecure about jobs and about how their employers will handle the global crisis going forward.”
Weimar, who anticipates a 100 basis point cut in rates later this month, said cutting interest rates would not immediately stimulate spending. — Sapa