December retail sales exceed expectations

Cape Town - Sales at retailers accelerated in December hot on the heels of Black Friday, capping a year of growth in general retailers, official figures show. 

Retail trade sales in December 2017 increased by 5.3% year-on-year, according to data released by Statistics South Africa (Stats SA) on Wednesday.

"December retail trade sales far exceeded our expectations, rising 5.3% year-on-year, but down -2.6% month-to-month on a seasonally adjusted basis," said Jason Muscat, senior economic analyst at FNB.

General dealers, clothing and “other retailers" each added 1.4 percentage points, jumping 3.3%, 5.9% and 14.7% respectively, compared to the previous year.

In a sign of recovery for durable goods sales, furniture retailers recorded a 10% increase - the eighth consecutive month that there has been an improvement. Food and beverage sales were up 0.6%, while pharmaceutical and hardware sales were both up 5.6%.

Sales on a month-to-month basis in 2017 were down by 2.6%, but rose in the three months to December 2017 compared to the previous year, data showed.

"We expect the sector’s recovery to continue throughout 2018, spurred on by low inflation, another 25bps interest rate cut in the first half of the year, and decent real wage growth.

"The prospect of higher taxes, and the growing likelihood of a 1 percentage point increase in the VAT rate, are likely to blunt a more robust recovery," said Muscat.

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