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Concerns with South African retail

Reference: Published by Luke Fraser, 20 April 2023


Statistics Retail trade sales in February 2023 down 0.5% YoY, according to statistics from South Africa (Stats SA).

A sample from Stats SA’s 2022 business sampling frame (BSF), which includes companies registered for value-added tax (VAT), is used to create a monthly survey that collects data from the retail trade sector.

According to the statistics agency, the retail trade sales survey is used to estimate the GDP and its various components, which are then utilized to create economic policy.

Additionally, you can compare business and industry performance using the information.

According to Stats SA, the greatest contributors to the 0.5% decline in February 2023 were General dealers (down 1.5% and providing -0.7 of a percentage point); and Retailers in hardware, paint, and glass (down 7.7% and contributing -0.6 of a percentage point).

The following chart shows the YoY percentage change in retail trade sales by retailer type:

Seasonally adjusted retail trade sales decreased by 0.1% month-over-month in February 2023 compared to January 2023 after rising by 1.5% MoM in January 2023.

Additionally, compared to the same period a year earlier, retail trade sales fell by 0.6% during the three months that ended in February 2023.

Retailers of hardware, paint, and glass (-6.1% and contributing -0,.5 of a percentage point) and general dealers (-0.6% and providing -0.3 of a percentage point) were once more the most negative contributions to the decline.

The biggest gainers were retailers of textiles, apparel, footwear, and leather items, which grew by 3.5% and contributed 0.7 percentage points.

The following summarizes retail trade sales during the three months that ended in February 2023:

Stats SA did, however, have some good news for the retail industry.

The three months ending in February 2023 saw a 1.2% increase in seasonally adjusted retail trade sales as compared to the three months prior.

merchants of textiles, apparel, footwear, and leather goods (4.0%, contributing 0.7 of a percentage point to the increase), as well as all ‘other’ merchants (2.8%, giving 0.3 of a percentage point), were the biggest contributors, according to Stats SA.

The most recent three months’ seasonally adjusted retail trade sales are shown below:


FNB stated that the data indicates the nation likely entered a slight recession in Q1 2023 despite the 1.2% gain in the three months ending in February 2023.

According to FNB, load shedding would increase production and operational expenses, which would have an impact on business profit margins, employment, and salary increases.

The forecast is primarily negative due to deteriorating corporate profit prospects and their influence on dividend distributions, even though non-labor income is still robust.

Additionally, low consumer confidence, high debt servicing costs, and increased inflation would probably cause a slowdown in household consumption in the upcoming months.

The loan market, according to the bank, is nonetheless extremely active and helps to underpin some of household expenditure.

However, FNB cautioned that slower income growth and the accumulation of more expensive credit lines could increase the chance of credit defaults, further straining household finances.