Retailers have seen their sales grow below expectations in March with Statistics South Africa (Stats SA) reporting that retail sales rose by only 2.8 per cent year-on-year in March, below the expanded and revised figure of 4.0 per cent in February.

Retail sales among general dealers saw the biggest gains at 6.0 while sales for those in textiles, clothing, footwear and leather goods saw an increase of 4.9 per cent.

However, a sharp slump in sales of food, beverages, cosmetics, furniture and appliances strangled growth. Sales of these goods had enjoyed a nice period of low inflation last year which boosted sales because it boosted real disposable income.

The market had expected retail sales to expand by about 4.5 per cent in March.

The chief economist at economic consulting firm Econometrix, Dr Azar Jammine, said: “The figures undoubtedly show slower growth than most people had anticipated but its difficult to draw definite conclusions because we don’t know how the spate of public holidays in march should that have boosted or depressed retail sales.”

However, with interest rates having risen by over 1.0 per cent in the past year and the slowing economy, Jammine said these figures are not entirely surprising. Consumers are beginning to tighten their belts as they battle to cope with increasing costs of basic necessities such as food and electricity.

The effects of the drought and the high unemployment rate which is currently at 26.7 per cent have also eroded consumer spending.

Source: NAM NEWS NETWORK