Reference: Published by Staff Writer, 27 March 2023

https://businesstech.co.za/news/trending/675503/business-owners-in-south-africa-hit-with-new-low/?utm_source=everlytic&utm_medium=newsletter&utm_campaign=businesstech

With the end of the global financial crisis in 2009, according to the Bureau for Economic Research (BER), South Africa’s attitude about merchants has fallen to a new low.

According to the BER’s most recent Retail Survey for the first quarter of 2023, confidence in the retail sector fell from 42% to 34%, or 6% points, below the long-term average.

This indicates that the retail industry is struggling and that customer demand is now poor.

Retailers’ business conditions are poor according to an index, which shows a similar negative trend from -23 to -41.

Retailers anticipate lower sales this quarter than in the first quarter of last year, but it is typical for the first quarter of the year to have lackluster sales compared to the holiday season.

In actuality, Stats SA reports that January’s retail sales were 0.8% lower than they were in the beginning of 2022. The results of the BER’s 2023 Q1 survey show a continuation of the decline in sales volumes of durable and non-durable items that began in the fourth quarter of 2022.

Yet, due to a rebound in the sales of clothing and shoes, semi-durable products appear to be holding steady.

This, according to the organisation, shows how consumers are being squeezed by rising inflation and a high interest rate that affects both durable and non-durable goods.

Consumer confidence is at levels last seen during the pandemic, the second quarter of 2022, when KwaZulu-Natal saw significant flooding, and the beginning of the war in Ukraine’s worldwide ripple effects, adding salt to the wound.

Consumer confidence fell to a negative 23 point level in Q1 2023, down from a negative 20 point level in Q3 2022 to a negative 8 point level in Q4.

The BER identified the electrical issue and worries about the high cost of living as the primary causes of the negative sentiment.

At the moment, load shedding is one of the most prominent handbrakes on enterprises.

By investing their hard-earned money in backup power solutions, retailers are attempting to lessen the impact of rolling blackouts.

Major businesses including Pick n Pay, Woolworths, and Shoprite have built up costs for diesel to fuel generators that total millions of dollars.

Though they are now elevated, the selling and purchase price indexes for retail items may taper in the future, the BER did point out this more encouraging development.