Economy

Retail sales ease, eye festive spending

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8 December 2011

Retail trade sales growth eased to 7.4% year-on-year in October, marginally lower than Bloomberg's consensus forecast of 7.5%, and down from a revised 7.7% figure for September, Statistics South Africa (Stats SA) said on Wednesday.

Stats SA recorded the highest annual growth rate in October for retailers in hardware, paint and glass (16.6%), followed by retailers in household furniture, appliances and equipment (13.2%) and retailers in textiles, clothing, footwear and leather goods.

In the three months ending October, real retail sales increased by 7.6% year-on-year.

"Although at relatively comfortable levels consumer confidence has not improved significantly over the last three quarters pointing to some hesitancy on the part of consumers particularly with regard to their outlook on their own finances," Standard Bank economists said.

The sale of "big-ticket" items were likely to be affected by hesitancy towards the end of the year.

Nedbank economists said sales would remain firm in the last months of the year, boosted by spending in the festive season.

"However, the benefit will partly be contained, as consumers remain cautious on the back of the fragile state of the economy as well as rising cost pressures and high debt," the bank said, adding that demand for credit remained subdued.

"As a result, together with subdued overall growth picture, we maintain the view of unchanged interest rates until the third quarter of 2012."

At its last meeting for the year, the Reserve Bank's monetary policy committee kept the repo rate unchanged at 5.5%.

Source: BuaNews