Retail sales in the 12 months to May 1 rose 13% year on year to R519bn, but they exclude the latest fuel price hikes and their effect will probably make consumers more tight-fisted in the months ahead.
The latest data from market research and global consulting company NielsenIQ, released on Wednesday, also found sales increased by R42bn in the four weeks ending May 1, a 10% increase year on year.
Cooking oil, frozen chicken and laundry detergents are among the products that rose the most, with month-on-month increases of 36%, 16% and 11%, respectively.
This is as a global recession looms, due mainly to Russia’s invasion of Ukraine, supply-chain issues worldwide, ongoing Covid-19 lockdowns in China, rising inflation and concomitant interest rate hikes, leading consumers to be more discretionary in their spending.
“Manufacturers will not be able to absorb the effects of the perfect storm of increasing input costs as they have before, and we can expect to see a rapid onset of inflationary impacts on prices,” Ged Nooy, MD of NielsenIQ SA.
The retail report is based on sales data from 10,000 stores of the main retailers, Woolworths Spar, Pick n Pay and Checkers — as well as 143,000 independent stores and spaza shops — and measures more than 80% of grocery sales in SA.
Consumers are still shopping less frequently than before the pandemic, despite the easing of lockdown restrictions. But they are spending more per visit, with the average value of the South African shopping basket increasing by R131 since April 2020.
“Despite a steady increase in value per buyer over the past two years, volume is not rising at the same rate, as consumers are forced to pay more and stretch their products,” Nooy said.
Liquor sales spiked after the government lifted bans that were implemented sporadically during the pandemic, and though stabilising they are still below pre-pandemic levels.
April was the first month that sales of alcoholic beverage slowed year on year, and Nooy said the bans might have changed the palate of consumers, as gin sales have now surpassed those of vodka.
“While beer is undoubtedly still the largest liquor category in terms of sales, consumption patterns about this alcoholic beverage have changed, with a continuation of the trend towards larger ‘long lasting’ bottles that consumers resorted to when supply was scarce,” Nooy said.
Almost all of SA’s manufacturers posted growth in this period, with 12 of the top 20 reporting double-digit gains.
“The Covid-19 era has stimulated the market in some ways, with people cutting back on out-of-home consumption. We continue to see growth through entrenched retail consumption at home,” Nooy said.
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