The JSE’s retail sector is showing signs of recovery after a turbulent few weeks triggered by US President Donald Trump’s aggressive trade protectionism.
While volatility may still persist given ongoing domestic political uncertainty, the temporary easing of US tariffs has brought much needed relief to retail stocks, with gains seen across most sectors of the JSE.
Woolworths led the recovery by midday on Tuesday with a 14.84% gain in the past week. Pepkor is up 14.2%, Mr Price 10.72%, and Shoprite 10.21%. Pick n Pay has added 7.64% and Spar 4.36%.
Food producers have also seen a boost, with Astral up 9.97%, AVI 9.55%, Tiger Brands 8.21% and Premier 8%.
Dubbed “Liberation Day” by Trump, on April 2 he stunned global markets by announcing sweeping “reciprocal” tariffs on all goods from US trading partners. SA exports were hit with tariffs of as much as 30%, sparking fears of a recession, shaking consumer confidence and leading to a sharp sell-off across the JSE.
The announcement sent top retailers such as Pepkor, Spar, Pick n Pay, and Woolworths into a tailspin. Even Shoprite, typically viewed as a defensive stock, also experienced losses.
Hardest hit immediately after Trump’s announcement were Pepkor, TFG, AVI, Premier Group and Tiger Brands. Though SA retailers have limited direct exposure to the US, analysts warned about severe knock-on effects due to increased import costs and global market instability.
Last Wednesday Trump instituted a 90-day pause on the bulk of the announced tariffs for all countries except China, for which he hiked duties to 125% and then 145%.
“Recent precipitous events such as Trump’s tariffs and attacks against SA, along with the government of national unity (GNU) budget fallout were very bad for retail stocks, which fell across the board,” said Opportune Investments owner and CIO Chris Logan. “With the rand also weakening the potential for sizeable job losses and a marked decline in investor confidence is likely.”
The sudden nature of the tariffs made it almost impossible for retailers to hedge against the demand shock, Logan added.
“Recent US political dynamics and the GNU issues both created headwinds for SA retail stocks,” said Aeon Investment Management portfolio manager Muneer Ahmed.
Ahmed said discretionary retailers were especially vulnerable as consumer confidence took and recessionary fears grew. While defensive stocks may offer limited protection, the broader economic pressures, worsened by political risk, were weighing on the entire sector, he added.
“Globally, tariff wars are fuelling market volatility and adding to recessionary fears, dampening overall investor sentiment. While defensive stocks offer some resilience, these combined political risks worsen existing economic pressure. Ultimately, the actual effect depends on how these political situations evolve and the specific policy outcomes,” Ahmed said.
The already fragile GNU is under further strain after a fallout over VAT increases. Finance minister Enoch Godongwana’s delayed budget speech in March saw him institute a half a percentage point increase for the 2025/2026 financial year, to be implemented on May 1, followed by a similar rise next year.
After falling as much as 6% against the dollar in the week after Trump’s first announcement, the rand has subsequently recovered the bulk of those losses.
Investec chief economist Annabel Bishop echoed Ahmed’s concerns, citing a slowdown in global demand. The bank lowered its 2025 GDP growth forecast to 1.3% from 1.8%.
Bishop also warned that fewer interest rate cuts in the US could limit the SA Reserve Bank’s ability to provide further monetary relief.
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