JOHANNESBURG - Retail sales in South Africa surged 4.8 percent to R83.3 billion in March as consumers upped spending ahead of the VAT percentage point increase and fuel hikes last month.
Data from Statistics SA (Stats SA) yesterday showed that general dealers, textiles, clothing, footwear and leather goods, pharmaceuticals, food, beverages and tobacco sales all contributed to the increase which beat the meridian estimates of a 4.4 percent increase.
Analysts said the increase was consistent with renewed consumer confidence, which shot up in the first quarter of this year after Cyril Ramaphosa became the new president of the country.
First National Bank senior economic analyst Jason Muscat said retail sales accelerated as consumers embarked on pre-emptive buying ahead VAT and fuel hikes last month.
Muscat said the sales could moderate in the months ahead as the first-quarter data tended to be distorted on a quarterly basis due to Black Friday and festive season shopping. “Despite the strong performance in the first three months of the year, the sector contracted -1.3 percent q/q in (the first quarter of 2018),” he said.
Despite the expected contraction in the first quarter, Muscat said overall annual growth was still on track for about 1.9 percent year-on-year in 2018.
Last month, FNB/Bureau for Economic Research (BER) said the consumer confidence sentiment raced to 26 points in the first quarter of the year from -8 points recorded for the fourth quarter last year.
The increase was the largest single quarter improvement since BER started publishing a composite index in 1982. New vehicle sales also increased 1.1 percent in the first quarter to 49 233 units.
Stats SA yesterday said clothing sales rose 10.6 percent in March, with pharmacies following at 7.9 percent.
Investec economist Annabel Bishop said quarteron- quarter, seasonally adjusted, annualised basis real retail trade sales, however, contracted 5.2 percent in the first quarter.
Bishop said anticipated hikes in the fuel price would erode consumer spending in the next few months.
“The historic average for real retail sales growth is just below 5 percent y/y in South Africa,” she said. “Stats SA and IHS record real retail sales growth rates of around 14 percent y/y in boom periods and South Africa’s figure 4.8 percent y/y published today is closer to the historic average than any boom period.”
Economists.co.za chief economist Mike Schussler said the retail sales figures showed that consumers only increased spending in anticipation of the VAT and fuel price increases. He expected retail sales to dampen in the future.