Retail up by 6,4%

2011-03-17 00:00

RETAIL sales in January 2011 grew by a lower-than-expected 6,4% year on year as consumers took a breather from their spending sprees in December 2010.

The latest performance of the retail sector has left unchanged widespread expectations that the SA Reserve Bank’s Monetary Policy Committee will only begin hiking interest rates early next year.

Statistics SA said yesterday impressive growth was experienced in three main categories, namely “pharmaceutical and medical goods, cosmetics and toiletries” (17,1%), “hardware, paint and glass” (17%) and “household furniture, appliances and equipment” (12,1%).

Despite the lower-than-expected growth in January, it is clear that retailers have experienced positive growth since late 2009.

“Though sharper than expected, the moderation in retail sales growth is no reason for concern, as the 6,4% year-on-year growth is still quite robust. Retailers’ expectations of the change in business conditions improved substantially for the second quarter of 2011, with the majority of respondents expecting a further improvement in trading conditions,” stated Standard Bank economist Nomvuyo Guma.

Nedbank economists have predic­ted a moderation in retail growth this year, as higher inflation and higher interest rates expectations next year weigh heavily on consumers’ confidence. They are concerned about the possible impact of high crude oil prices on fuel prices, which will impact on inflation and interest rates.

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