Retail trade sales prove resilient despite consumer caution

The retail sector has continued to show signs of resilience despite ongoing economic strain on households and inflationary pressures.

In March, retail trade sales rose 2.8%, with sales up compared to the same period in 2024, thanks to health and beauty as well as fashion retailers who emerged as pockets of strength, Stats SA said in its retail sales data released on Wednesday.

Clothing, footwear and accessories also helped lift overall figures, indicating that consumers were still willing to spend on personal care and apparel even as they tightened their belts elsewhere.

“Pharmaceuticals and medical goods, cosmetics and toiletries (7.1% and contributing 0.5 of a percentage point); and textiles, clothing, footwear and leather goods (3.5% and contributing 0.5 of a percentage point),” the statistician said.

There was a slight decline in sales from February to March (0.2%) following a particularly weak February, said Stats SA. The first quarter of 2025 showed solid growth compared to the same period in 2024, with general dealers and clothing stores driving most of the gains.

However, when viewed over the full first quarter of the year, sales rose 4.1% boosted by general dealers and clothing retailers.

The shift from the final quarter of 2024 to the start of 2025 was more stable, with a slight lift in seasonally adjusted sales. Growth came from hardware and home improvement outlets, health and beauty shops and fashion retailers, according to Stats SA.

The Nielsen IQ’s State of the Retail Nation report found that in 2024, consumers spent R103bn on food and liquor at independent traders, slightly less than the previous year, as overall fast-moving consumer goods spend reached R637bn, driven more by price hikes than increased buying. The report suggests that shoppers continued to prioritise essentials using promotions, private label products and loyalty programmes to stretch their budgets.

Meanwhile, consumer inflation in April edged up slightly to 2.8% but remained low thanks to falling fuel prices and weak demand, Business Day reported. While housing and food costs pushed prices higher, overall inflation stayed comfortably below the Reserve Bank’s target range.

Investec economist Annabel Bishop said the muted inflation trend supported the case for interest rate cuts later this year, unless new targets were set in the budget.

goban@businesslive.co.za