- According to figures released this Wednesday by Statistics South Africa, retail sales in the country fell 0.8 per cent year on year in January.
- The data provides an insight into consumer demand in the country’s most industrialized economy.
- Sales for the three months to the end of January were also down by 0.2 per cent compared to the same period last year.
Statistics South Africa has released figures showing that retail sales in the country declined by 0.8 per cent year on year in January, following a revised 0.5 per cent decline in December. On a month-on-month basis, sales rose by 1.5 per cent. These figures provide insights into consumer demand in Africa’s most industrialised economy. Retail trade sales decreased by 0.2 per cent in the three months to the end of January, compared with the same period last year, the statistics agency said.
Food, beverages and tobacco in specialised stores fell by 7.3 per cent and contributing 0.7 less of a percentage point. Hardware, paint and glass decreased by 4.8 per cent and contributing 0.4 less of a percentage point.
Seasonally adjusted retail trade sales increased by 1.5 per cent in January 2023 compared with December 2022. This followed month-on-month changes of negative 0.5 per cent in December 2022 and 1.1 per cent in November 2022.
The largest positive contributor was retailers in textiles, clothing, footwear and leather goods which grew by 4.3 per cent and contributing 0.8 of a percentage point.
Effects of power cuts on Retail sales in South Africa
According to Biz News, the severe power cuts in South Africa are hurting the country’s economy and stifling growth, warned the Reserve Bank of South Africa. The bank estimated that the country could lose up to 2 percentage points in growth due to power cuts and projects growth of 0.7 per cent next year, assuming fewer days of power cuts. The power cuts are causing lower production, higher costs, and reduced income for businesses, such as mining and retail, and are impacting crop yields due to reduced irrigation.
The outages have had a massive impact in shopping malls which only have sufficient back up energy to power essential services such as emergency lighting.
Customers tend to stay out of the stores during power cuts and fewer people visit malls. Shoprite Holdings says it spent an additional R100 million a month on diesel to power generators during the severe power cuts last year.
According to an article by Reuters published on February 8, 2023, South Africa’s second biggest supermarket chain, Pick n Pay, sales growth in South Africa was negatively impacted by unprecedented power cuts in the last quarter of 2022.
“The group has more recently had to contend with a significantly more difficult trading environment, with unprecedented load shedding (power cuts) and a further downturn in the economy,” the retailer said.
“Inevitably, load shedding has disrupted customers, with some impact on turnover. Of greater consequence, however, are the substantial unplanned costs incurred in running localised power generation for stores.”
Retailers in textiles, clothing, footwear and leather goods grew by 5.0 per cent and contributing 0.9 of a percentage point; and all ‘other’ retailers grew by 3.9 per cent and contributing 0.4 of a percentage point.
Read: South Africa’s mining output on persistent decline
