The situation will get a little tougher for consumers in the months ahead. Apart from the rising petrol price following months of cumulative declines‚ electricity tariffs will rise steeply mid-year.
Retail trade sales increased by 1.7% y/y in January after increasing by a revised 2% (3.4%) y/y in December.
A median consensus forecast from a survey of six economists showed that growth in retail sales was expected to have slowed to 2.7% year on year.
UFX.com managing director Dennis de Jong said Finance Minister Nhlanhla Nene would be pleased to see retail sales figure continue in positive territory‚ albeit slightly down on last time.
"Consumers have enjoyed a period of falling petrol prices and interest rates remaining untouched. Yet Nene will know that the outlook for consumers in the months ahead is significantly less rosy. With tariffs on electricity set to rise sharply‚ and oil prices showing signs of rising‚ South African consumers may look to restrict spending in the short term‚" said De Jong.
Sales fell 0.1% month on month after decreasing by 0.9% in December and increasing by 1.3% in November. Retail sales are very volatile on a month-to-month basis.
Stats SA said the main contributors to the 1.7% increase were retailers in textiles‚ clothing‚ footwear and leather goods which contributed 1.8 percentage points.
The retailers that drove sales reflected a usual trend by consumers to stick to less expensive items during times of weak economic growth.
Seasonally adjusted retail trade sales increased by 0.6% in the three months ended January 2015 compared with the previous three months.
Source: BDpro via I-Net Bridge
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