Good news for retailers in 2012

2012-02-02 12:42

Low interest rates and improving wages could spell good news for retailers this year, according to the SA Council of Shopping Centres (SACSC) economic report, released today.

“Low interest rates and rising disposable incomes could push retail sales in South Africa to 4.5% growth in 2012 – and even higher in 2013,” according to the SACSC report for the first quarter of 2012.

Interest rates remained at their lowest levels in over 30 years, which had helped push overdrafts, credit card spending, and personal loans to 12.6% growth year-on-year in November 2011.

“We’ve also seen instalment finance – mainly for vehicles purchases and durable goods – grow by about 10% over the same period,” said SACSC general manager Amanda Stops in a statement.

Households were also spending more on durable good like cars and computers, she said.

Household debt levels were dropping and real wages – taking out the effect of inflation – were improving, meaning households had more to spend.

“But inflation is likely to remain a problem, along with the risk of increasing unemployment,” according to the report.

The SACSC warned that crippling strikes and rising unemployment could negatively affect retailers.

“But the big risk factor remains the Eurozone and if that implodes, all bets are off.”

Retail sales growth increased 6.8% year-on-year in November 2011, with retailers of hardware, paint, and glass growing by almost 18%.

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