Johannesburg – Retail sales volumes show muted shopping activity in November, volumes decreased by 4% compared to the same period a year ago.
This decline was noticeably bigger in comparison to the 2.3% decline recorded in October (revised down from 1.8% y/y).
This suggests that shopping activity during Black Friday was more muted in 2020 compared to the previous years.
Nevertheless, sales volumes rebounded by 1.8% on a month-on-month and seasonally adjusted basis, following a decline of 0.5% m/m in October (as consumers delayed some of their purchases in anticipation of specials).
Once again, hardware material and household furniture were the strongest performing categories, recording 14% y/y and 7.8% y/y respectively.
On the opposite end of the spectrum, pressure continued for “Other retailers” (including jewellery and sports equipment retailers) as well as Clothing and Footwear retailers, which declined by 26.1% y/y and 5.6% y/y respectively.
“We attribute these trends to the pandemic-induced loss of buying power and changes in consumer behaviour (as people spend more time at home and limit their spending to essential goods),” Siphamandla Mkhwanazi, FNB Senior Economist said.
In all, retail sales volumes have performed better than initially expected, supported by the Temporary Employer/Employee Relief Scheme (TERS) payments, the government’s extended social grants programmes and the low interest rate environment.
“However, this support is now subsiding. Pressure on volumes will be exacerbated by the resurgence of Covid-19 infections and the subsequent reintroduction of lockdown in December. These factors, combined with rising food and fuel prices, bode ill for the short-term retail sales outlook. In the same breath, the longer-term outlook remains uninspiring, weighed on by rising unemployment and generally low consumer sentiment,” Mkhwannazi further said.
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