2.3% rise in retail sales tops forecastsComment on this story
December retail sales figures, released by Statistics SA yesterday, beat market expectations and were in line with most retailers’ latest trading figures, analysts said.
Retail sales rose 2.3 percent year on year in December, down from 3.6 percent in November but better than the market forecast of 1.3 percent.
For the fourth quarter of 2012, retail trade sales increased 2.3 percent from the fourth quarter of 2011. The main contributor was textiles, clothing, footwear and leather goods at 3.6 percent.
The category of “other retailers” lifted sales by 5.4 percent in the fourth quarter and household furniture, appliances and equipment increased 3.9 percent.
In December, overall sales increased by 1 percent on a seasonally adjusted month-on-month basis.
In 2012 as a whole, retail sales rose by 4.3 percent, down from a 5.9 percent advance in the previous year.
Absa Investments equity analyst Chris Gilmour said the markets had expected the December figure to be about 1.6 percent.
“Our expectations for the year are that retailers will experience a generally declining trend but which would still remain positive.”
This, he said, was because consumers were under pressure from the rising cost of fuel and electricity and the ongoing weakening of the currency.
Gilmour said even if Eskom did not get the 16 percent annual tariff increase it had asked for, whatever increase the National Energy Regulator of SA recommended would still put consumers under pressure.
He forecast retail sales growth of 2.5 percent to 3 percent on average for most of this year. “I will be very surprised to see the figures going negative.”
He said yesterday’s data were in line with recent sales updates from major retailers, which meant that they would have to work even harder.
Investec group economist Annabel Bishop said earlier this week that retail sales were expected to be subdued over December because many households in South Africa had high debt levels. This was clear from many retailers’ trading figures.
The Spark Cash Index, which measures the average value of cash withdrawals across more than 2 000 Spark ATMs across South Africa, recorded month-on-month growth of 9.6 percent in average cash withdrawal figures for December last year from R442.71 to R485.07.
Russel Berman, the sales director of Sparks ATM Systems, said retail data were in line with increased spending among South African consumers over the festive season.
For the month of December, Shoprite reported an increase of 10.8 percent in retail sales.
Clothing retailer Foschini said December sales increased an annual 10.5 percent. Same-store growth was 4.7 percent. Mr Price’s sales grew 10.7 percent for its third quarter to December.
Gilmour said the retailers’ figures were not spectacular but solid.
Johannes Khosa, an economist at Nedbank, said that although retail sales growth slowed to 2.3 percent in December from 3.6 percent in the previous month, it was better than the consensus forecast of 1.2 percent.
He said consumer spending was likely to moderate this year as weak confidence, heightened worries about job security and high levels of debt made consumers more cautious about spending on non-essential items.
“High inflation will also erode disposable income, offsetting some of the benefits of higher wage settlements.”
Khosa said yesterday’s figures indicated that consumer spending, a key component of the economy, had lost some momentum in the fourth quarter.
The JSE general retail index was flat on the news yesterday.