Consumer spending slumps

2009-01-21 00:00

South Africa’s retail sector experienced a depressing pre-festive period as sales in real terms plunged four percent year on year in November 2008, the seventh consecutive month of declining retail sales.

Statistics South Africa’s data revealed yesterday that the retail sector is under immense strain amid tougher economic conditions.

The sector was unable to rebound in November, despite the fact that the final two months of the year usually deliver firm retail sales.

Widespread consumer spending cuts appear to have firmly taken hold as the South African consumer battles to cope with high interest rates, an erosion of purchasing power and retrenchments.

Standard Bank senior economist Dr Johan Botha said the growth rate over the first 11 months of 2008 dropped to 2,4%, compared to a growth rate of 5,8% in the corresponding period in 2007.

“The last quarter of 2008 is likely to record weak sales growth compared with previous years, due to the unfavourable economic environment. Consumer spending is unlikely to improve in the months ahead due to the deteriorating economic climate and a lack of job security, which will put further strain on consumer confidence,” added Nedbank’s Group Economic Unit.

Economists believe the latest figures support the case for an interest rate cut. The Reserve Bank’s Monetary Policy Committee (MPC) meets on February 4 and 5 to decide on the matter.

Meanwhile, anecdotal information from several KZN malls suggest that although foot-count levels remained very high, consumer spending moderated during December 2008.

However, most local centres appear to be pleased with the trading levels experienced, particularly given the fact that they operated in a tough trading environment.

The week leading up to Christmas Eve seems to have attracted the most number of visitors to local malls.

Join the conversation! encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

We reserve editorial discretion to decide what will be published.
Read our comments policy for guidelines on contributions. publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
Comments have been closed for this article.

Inside News24

Traffic Alerts
There are new stories on the homepage. Click here to see them.


Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.

Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire network.


Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.

Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.