Retail trade sales posted another strong performance in May, highlighting resilient consumer appetite for discretionary purchases even as the pace of growth eased slightly from April’s brisk rebound.
Measured in real terms and adjusted for inflation, retail sales rose 4.2% year on year in May, following the 5.2% increase recorded in April.
The latest data from Stats SA showed growth remained firmly supported by strength in clothing and general dealers.
Retailers in textiles, clothing, footwear and leather goods were the standout performers, with sales rising 12.5% year-on-year and contributing 2.1 percentage points to the overall increase. General dealers also posted a solid performance, recording 3.6% growth and contributing 1.6 percentage points to headline retail growth.
On a month-on-month seasonally adjusted basis, retail trade sales edged 0.1% higher compared with April.
For the three months ended May, retail sales increased 3.5% relative to the same period a year earlier.
Once again, the largest contributions came from clothing retailers, which rose 9.5%, adding 1.5 percentage points, and general dealers, which grew 2.8%, contributing 1.3 percentage points.
Standard Bank Group head of SA macroeconomic research Elna Moolman said there were a couple of tailwinds supporting the consumer.
“Wage settlements generally remain above inflation, with inflation particularly low over the last couple of months, partly because of lower fuel prices, with consumers benefiting from fuel prices that were nearly 15% lower on a year on year basis in May this year,” she said.
Moolman noted consumers are also benefiting from lower interest rates, and their data suggests there was a renewed increase in the two-part retirement withdrawals in the first part of the new fiscal year.
“We remain reasonably constructive about the outlook for consumer spending growth in the coming months, but in real or inflation adjusted terms it may moderate somewhat given the expected rise in inflation.”
On a seasonally adjusted basis, sales were flat in the latest three months compared with the preceding three-month period.
Within this period, food, beverages and tobacco in specialised stores declined 2.2%, subtracting 0.2 percentage points, while clothing retailers eased 0.4%, reducing growth by 0.1 percentage points.
The largest positive contributions to quarter-on-quarter growth came from “other” retailers, which increased 1.4%; hardware, paint and glass retailers, up 0.7%; and general dealers, rising 0.2%.
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