Retail sales surged in November, boosted by Black Friday specials and the “two pot” pension withdrawal scheme, despite economic uncertainties.
Measured in real terms, retail sales rose 7.7%, adding to a revised 6.2% jump in October, Stats SA said on Wednesday.
General dealers were the top drivers, recording an 11.9% increase and contributing 5.2 percentage points to the overall rise. Textiles, clothing, footwear, and leather goods reported a 9.5% increase, contributing 1.7 percentage points to the overall number. Household furniture, appliances and equipment expanded 9.4%, adding 0.5 percentage points.
“While the annual rate of increase in retail sales during November beat market expectations, we had expected retail spending to reflect and even stronger outcome during November given that the ‘two-pot’ pension withdrawal corresponded with Black Friday month,” Stanlib chief economist Kevin Lings said.
Elna Moolman, Standard Bank Group head of SA macroeconomic research concurred: “Individuals received payouts from the withdrawal of some of their retirement benefits after the implementation of the two-part retirement reform in September last year. Our data shows that these payouts peaked in the second half of October, and this would mean that more funds were available in November to increase spending,” she said.
The two-pot withdrawals are estimated at about R50bn for 2024, R25bn for 2025 and R27bn for 2026.
The only sector to report a decline was hardware, paint and glass, where sales fell 4.3%, subtracting 0.4 percentage points from overall growth, Stats SA said.
On a monthly basis, seasonally adjusted retail trade sales inched 0.8% higher in November after a marginal 1.6% increase in October and a 0.4% decline in September, reflecting steady momentum heading into the festive season.
For the three months ending November 2024, retail trade sales were 5.1% higher year on year. General dealers once again led the pack with a 9.4% increase, contributing 4.2 percentage points. Household furniture and appliances (12.1%) and textiles and clothing (2.9%) also made significant contributions, each adding 0.5 percentage points to the overall growth.
Seasonally adjusted, retail trade sales for the three months grew by 1.4% quarter on quarterly, with general dealers accounting for the largest share of the increase.
Lings noted that during the first 11 months of 2024 retail sales grew by an average of 2.3%, which is significantly better than an average decline of 1.7% during the corresponding period in 2023.
Meanwhile, manufacturing production declined 2.6% in November, driven primarily by declines in the output of motor vehicles, basic iron and steel, wood products, and textiles. The petroleum, chemical products, rubber, and plastics division made the largest positive contribution with a 1.3% increase. Seasonally adjusted, production decreased by 1.1% from October 2024.
Besides two-pot fund payouts, Moolman also attributed the strong retail sales growth to interest rate relief from the Reserve Bank, low inflation, slowing retail price increases.
“We remain constructive about the outlook for consumers, which we assume will be supported by persistently low inflation and further interest rate relief from the Reserve Bank.”
The strong retail sales performance came despite a slight dip in consumer confidence in the fourth quarter of 2024. The FNB/BER Consumer Confidence Index edged lower to -6 from -5 in the previous quarter. However, consumer sentiment remains higher than in recent years, buoyed by the relief of load-shedding, interest rate cuts, and slowing inflation.
With Jana Marx
Update: January 22 2025
This story contains further comments from economists
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