March’s 1% year-on-year retail sales growth - the first positive movement in 13 months – provided the most stark and eagerly willed confirmation of a consumer economy about-turn. Analysts expect lower interest rates and a stabilizing job market to keep the numbers in the positive zone.
February’s retail sales figures marked another – but this time unexpected – decline. Although most economists predicted an increase of about 0.5%, the industry continues its war effort in negative territory.
Reflecting the smallest decline since February 2009, January’s retail sales growth mirrors a slow but sure recovery in consumer expenditure. But, given still high consumer debt levels, persistently tight disposable income and the effects of weak sales figures throughout 2009, retailers are proceeding gingerly.
Despite a shallower drop in December retail sales – down by 3.7% rather than the anticipated 7.8% - the sector remains in a precarious state. The December figures give an average decline of 5.3% for the quarter and 4.9% for the full year.
Against a backdrop of below-expectation festive season retailer performances, furniture retailer Lewis presented a happy contradiction. The Group’s most recent trading update, released last month, reveals third quarter revenue increasing by 7.9%, with December sales up by 11.7%. Although the retailer’s target market is more vulnerable to job losses, unemployment has had a negligible effect on sales.
With the festive season a done deal, there is a particularly keen sense of anticipation surrounding retail sales figures. For the analysts, the performances of those retailers that have already released their results has been somewhat disappointing, but the data also provides a useful reality check – for buyers and sellers alike – as the country enters a critical year in its history.
It’s results season and, while the major retailers aren’t exactly making merry, things are positively looking up for some. That said, September’s retail trade sales figures – which reflect a worse-than-anticipated 5.1% decline – reiterate a gloomy reminder of the stop-start nature of the mechanics of economic recovery.
The South African consumer’s top shops emerged in fine style at The Times and Sowetan 2009 Retail Awards, in a hotly contested event that mirrored the fiercely competitive recessionary retail environment. The 2009 Awards were appropriately revamped to ensure a more comprehensive representation of retail players.
The decline in household spending continues seemingly untouchable. In its September Quarterly Bulletin, the SARB reported that the rate of decline of real final consumption expenditure by households climbed from 4.8% in the first quarter of 2009 to 5.8% in the second quarter.
The business of economic recovery is very much a case of one step forwards, two steps backwards. For retail, movement in June was clearly one of retreat. Following a 4,4% drop in May, June’s retail sales dived by a startling 6,7%, giving imminent-recovery proponents cause for reconsideration.
|
