BLACK Friday deals in South Africa boosted retail activity to rise above market expectations in November 2021, buoyed by a rise in clothing and general dealers’ sales.
Data from Statistics South Africa (StatsSA) showed that retail trade sales surged by 3.3 percent in November from a year earlier, up from an upwardly revised 1.9 percent rise in the previous month.
This was the third consecutive month of growth in retail activity and the strongest since June, well ahead of the market’s forecast of a 2 percent increase.
StatsSA said six of the seven major categories of sales recorded annual expansion in November.
But retail activity was mainly boosted by sales of textiles, clothing, footwear and leather goods, which rose to 10.3 percent in November from 6.2 percent in October.
General dealers also recorded robust growth of 3.6 percent from 0.3 percent the previous month.
The only category that contracted was “hardware, paint and glass”, which has declined for the fifth consecutive month in November, easing by 0.2 percent.
Nedbank economist Johannes Khosa said sales were lifted by Black Friday specials and some improvement in income growth due to less stringent lockdown restrictions. Khosa said slightly better labour market conditions would continue to encourage consumer spending in the short term.
“However, the upside will be partly contained by higher food and fuel prices, rising interest rates and fragile consumer confidence,” he said.
“Consumer spending will remain the main driver of the economic recovery in the last quarter of 2021 and calendar.”
On a monthly basis, retail trade lifted by 1.9 percent in November after shrinking 1.3 percent in the previous month.
In the three months ended November, seasonally adjusted retail trade sales increased by 4.1 percent compared with the previous three months.
Though the retail industry enjoyed increased activity in November, the sector remains well behind their pre-crisis levels as the sector was 2 percent lower than the 2019 average.
FNB economist Siphamandla Mkhwanazi, however, said the near term retail sales should still benefit from factors such as the improved roll-out of income support grants, an improvement in consumption credit uptake, the better-than-expected civil wage agreement, the swift recovery in non-labour income and easier lockdown restrictions.
“However, we are concerned about the intensifying consumer headwinds that should weigh on longer-term shopping activity,” Mkhwanazi said.
“These include higher living costs, especially transportation and electricity costs, still depressed consumer sentiment, weak labour market and the less supportive interest rate environment.”
BUSINESS REPORT ONLINE