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The SA Daily 12 December 2019

A toll taken on retail trade

  • Retail trade has been depressed despite retail inflation having been subdued for a long time now. Real demand, to capitalise on subdued prices, is clearly lacking.
  • The SA economic fundamentals are weak; decisive policy reforms remain lacking; and power cuts have been having a decimating effect on all concerned.
  • Retail sales volumes, not adjusted seasonally, in October managed a mere 0.3% y/y, after just 0.4% y/y in September. Three-month moving average sales growth posted 0.6% y/y in October, compared to 1.1% y/y in September, due to weak consumption.
  • Seasonally-adjusted sales volumes slipped 0.2% m/m in October, from 0.6% m/m in September, marking a poor start to 4Q19 from a GDP growth perspective. In 3Q19, 2.6% q/q seasonally adjusted and annualised growth by the total trade sector came largely from the wholesale, motor trade and accommodation subsectors. The retail trade subsector was weak in that quarter.
  • In value terms, retail sales slowed to 3.2% y/y in October, from 3.3% y/y in September and 3.9% in 3Q19. This is significantly below the 9.0% y/y average 2003-2018. Even during the 2009 domestic recession, triggered by the global financial crisis, retail sales averaged 5.1% y/y despite volumes contracting by 3.3% y/y.

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