Global Courant 2023-04-20 12:37:45
Statistics South Africa (Stats SA) says retail sales fell 0.5% year-on-year (YoY) in February 2023.
Stats SA collects retail information through a monthly survey, which is based on a sample from Stats SA’s 2022 Business Sampling Frame (BSF), which includes businesses registered for Value Added Tax (VAT).
The statistics agency said the retail sales survey is used to estimate GDP and its components, which are used to formulate economic policy.
In addition, the statistics can be used to compare the performance of companies and sectors.
Stats SA said general dealers (down 1.5% and contribution of -0.7 percentage points); and Retailers of hardware, paint and glass (-7.7% and a contribution of -0.6 percentage point) were the largest contributors to the 0.5% decline in February 2023.
The year-over-year percentage change in retail sales by retailer type is shown below:
On a monthly basis, seasonally adjusted retail sales fell 0.1% in February 2023 compared to January 2023, following a 1.5% MoM increase in January 2023.
In addition, retail sales for the three months ending February 2023 fell 0.6% compared to the same period a year earlier.
The largest negative contributors to the decline were again Retailers in hardware, paint and glass (-6.1% and contribution -0.5 percentage point); and general dealers (-0.6% and contributions of -0.3 percentage points).
While retailers in textiles, clothing, shoes and leather goods (with a growth of 3.5% and a contribution of 0.7 percentage point) made the largest positive contribution.
Retail sales for the three months ended February 2023 are below:
However, Stats SA did have positive news for the retail sector.
Seasonally adjusted retail sales rose 1.2% in the three months ending February 2023 over the previous three months.
Stats SA said the biggest contributors to the increase were retailers of textiles, clothing, footwear and leather goods (4.0% and a contribution of 0.7 percentage points); and all ‘other’ retailers (2.8% and a contribution of 0.3 percentage point).
Below is seasonally adjusted retail sales for the last three months:
Outlook
Despite the 1.2% increase in the three months ending February 2023, FNB said the data suggests the country likely entered a mild recession in the first quarter of 2023.
FNB said the increase in production and operating costs due to the tax shedding would affect operating margins, employment and wage increases.
While non-labour income remains resilient, the outlook is mostly negative, with a weaker outlook for corporate earnings and its impact on dividend payments.
In addition, high inflation, debt levels and low consumer confidence are likely to lead to subdued household consumption spending in the coming months.
However, the bank said the credit market remains incredibly active and partially supports household consumption.
That said, FNB warned that the risk of credit default could increase due to slower income growth and the accumulation of more expensive lines of credit, which could put further pressure on household finances.
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