SA’s retail trade sales increased by 6.3% in October, driven by strong performances by general stores and furniture retailers, according to the latest data from Stats SA. This growth signals a rebound in consumer spending, supported by improving economic conditions and lower inflation.
Stats SA said general dealers experienced an increase of 11.5%, contributing 4.9 percentage points to the overall retail trade sales growth. Household furniture retailers, appliances and equipment sales increased 16.6% contributing 0.7 percentage points.
Other sectors, including textiles, clothing, footwear, leather goods, as well as pharmaceuticals, cosmetics and toiletries, also posted positive results, albeit on a smaller scale.
However, not all sectors did well. Retailers in hardware, paint and glass experienced a 3.7% decline, cutting 0.3 percentage points from the overall performance.
“Retailers in textiles, clothing, footwear and leather goods [rose] 3.1%, contributing 0.5 of a percentage point; and retailers in pharmaceuticals and medical goods, cosmetics and toiletries [rose] 5.3%, contributing 0.4 of a percentage point). The only negative contributor was retailers in hardware, paint and glass (-3,7% and contributing -0,3 of a percentage point),” Stats SA said.
Month-on-month comparisons also showed a slight improvement, with seasonally adjusted retail trade sales increasing 1.6% in October compared to September, reversing the negative trend seen in the previous month, it said.
Standard Bank’s group head of SA macroeconomic research, Elna Moolman, said the growth in October could be partly attributed to technical factors, such as weaker months in the previous year, which created a low base for comparison. However, when adjusted for inflation, the performance remained strong, suggesting a sustained recovery in consumer spending.
“If we look at it in real terms, in other words, when we strip out the impact of prices and try to gauge volumes, then the data has been quite strong, boosted of course by the significant easing that we've seen in inflation in recent months. But even in nominal terms, in other words, when we don’t exclude the impact of prices, this data was quite strong in October,” she said.
“The trend in recent months has generally been upwards and is consistent with our expectation that there will be a recovery in consumer spending growth in the coming months.”
The easing of inflation, particularly in food prices, has also supported this growth. Stats SA announced that consumer inflation increased marginally to 2.9% in November, up from 2.8% in October, with food and nonalcoholic beverage inflation falling to its lowest rate in 14 years. Prices for essential items such as bread, cereals and eggs eased, provided some relief to consumers.
However, fuel prices slightly increased, and dining out became more expensive, with restaurant and hotel prices increasing by 5.9% year on year.
Despite these inflationary pressures, there is a growing sense of optimism in the economy. Business confidence surged to its highest level since 2015, driven by factors such as increased international tourism, higher metal prices and supportive government policies, according to the SA Chamber of Commerce and Industry.
Consumer confidence, particularly among high-income households, also improved, with the FNB/BER consumer confidence index reaching its best festive season level since 2019.
Retail confidence followed suit, climbing to a three-year high in the fourth quarter of 2024, indicating strong consumer demand and optimism ahead of the holiday season, according to the latest Bureau for Economic Research retail survey.
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