Retail Update

Growth in South Africa's retail sales slowed to 2,3% year-on-year (y/y) in December 2012 from a revised 3,6% in November 2012. Economists had expected subdued sales over the month, with growth forecast at 1,2%.

On a month-on-basis basis, Statistics South Africa (Stats SA) on 13 February 2013 said sales were up 1% in December 2012, and increased by 2,3% in the last quarter of 2012 compared with the same period a year ago (see table 1).

Anisha Arora, analyst at 4Cast said: "The importance of retail sales reflects the health of households' consumption and expenditure, so with the release showing that seasonally adjusted retail trade was down by 0,2% quarter-on-quarter in Q4, South Africa will again be relying on government spending and fixed investment to sustain positive GDP growth. We don't expect the retail figures will ease the environment for the MPC to cut rates, especially when inflation risks are somewhat on the upside with the new basket weightings coming into effect from soon to be released January 2013 CPI data."

Peter Attard Montalto, economist at Nomura said: "This number continues to indicate that there was some underlying strength into the end of the year in the economy though much of this is probably credit-supported. We are also seeing the impacts of a strong wage round with large real wage increases, before the story of 2013 hits, which will be falls in employment, in farming and mining in particular. This number has no effect on our view of rates on hold this year (2013).

This last piece of Q4 data puts our GDP bean count estimate at 2,1%-2,2% y/y." Slowing growth in sales adds to signs that fourth quarter economic growth should be weak.

Table 1: Key growth rates in retail trade sales at constant 2008 prices

The highest annual growth rates were recorded for:
All ‘other’ retailers (5,8%);
General dealers (2,6%); and
Retailers in textiles, clothing, footwear and leather goods (2,3%).


The main contributors to the 2,3% increase were general dealers (contributing 0,9 of a percentage point), retailers in textiles, clothing, footwear and leather goods and all ‘other’ retailers (both contributing 0,6 of a percentage point).
Retail trade sales increased by 2,3% in the fourth quarter of 2012 compared with the fourth quarter of 2011. The main contributors to this increase were:
Retailers in textiles, clothing, footwear and leather goods (3,6% and contributing 0,9 of a percentage point);
All ‘other’ retailers (5,4% and contributing 0,6 of a percentage point);
Household furniture, appliances and equipment (3,9% and contributing 0,3 of a percentage point); and
General dealers (0,8% and contributing 0,3 of a percentage point) (see table 2).

Table 2: Retail trade sales at constant 2008 prices for the latest three months by type of retailer



Source:

News 24, dated 13 February 2013

Stats SA, accessed 13 February 2013