/ 16 February 2023

Consumer spending muted in December, retail data shows

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Retail trade sales decreased by 1.6% in March 2023 compared with March 2022, Statistics South Africa (Stats SA) said on Wednesday.

Retail sales contracted 0.6% year-on-year in December, with pharmaceuticals, medical goods and cosmetics and toiletries, as well as hardware, paint and glass being the biggest drag on growth, Statistics South Africa said on Wednesday.

Sales in pharmaceuticals, medical goods, cosmetics and toiletries declined by 5.2% while hardware, paint and glass recorded a sales decrease of 3.9%.  

Overall, retail trade sales increased by 1.7% in 2022 compared with 2021. 

Five of the seven retailer types recorded a rise in sales in 2022, said Raquel Floris, the deputy director for distributive trade statistics at Stats SA.

“Textiles and clothing registered the highest growth rate, increasing sales by 6.8%. General dealers as well as retailers specialising in food and beverages and household goods also recorded better results,” Floris said.

“The miscellaneous category referred to as ‘all other retailers’ registered a marginal increase of 0.1%. On the downside, retailers in pharmaceuticals and medical goods and merchants specialising in paint and glass recorded lower sales volumes in 2022. Hardware, paint and glass saw the largest decline with sales shrinking by 6.9% in the year.”

Economists from Nedbank had forecast annual growth in retail sales of 0.2% in December, down from 0.4% in November, subdued by load-shedding and weaker household finances. 

“Generally poor economic conditions would have convinced cautious consumers to remain conservative and limit taking more debt even during the festive season. The modest growth in retail sales is likely to have been driven partly by tourist spending as the number of overseas visitors shot up over December,” the economists said