June retail sales still in negative territory

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Retail sales for June declined by 7.5%.
Retail sales for June declined by 7.5%.
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  • Retail sales continued to contract in June, in line with analysts' expectations.
  • While more retailers were able to trade under lockdown level 3, consumer demand still remained subdued.
  • The biggest contractions were recorded for 'other' retailers, food, beverages and tobacco retailers as well as clothing and textiles.

Annual retail sales for June declined by 7.5%, according to Stats SA.

Stats SA on Wednesday released retail sales figures for June. A continued contraction in June is in line with analysts' expectations. 

"We suspect that consumers continued to hold off on discretionary related purchases amid low consumer confidence levels and weak income growth," FNB said in a weekly outlook report, ahead of the release of the results. 

Investec economist Lara Hodes noted that while all retail trade was allowed to resume under lockdown level three, which was enforced during June, consumer demand remained subduded.

"Indeed, the path to recovery of the retail sector and the economy as a whole is likely to be arduous, underpinned by the consumer's diminished ability and inclination to spend."

The largest declines were recorded for "other" retailers, who down 46.3% from June 2019. These retailers include those who sell stationery and reading material, jewellery, watches and clocks, sports goods and entertainment as well as second-hand goods, and repairs, and other trade not in stores. 

Textiles, clothing, footwear and leather goods retailers, meanwhile, saw sales decline 7.6%.

Both these categories were among the biggest contributors to June's overall decline in sales.

The data also showed that sales of food, beverages and tobacco in specialised stores suffered the second largest decline by as much as 11%.

Retail trade sales at constant 2015 prices: year-o
Retail trade sales, relfetcting year-on-year percentage change, at constant 2015 prices (Source: Stats SA)

Government has slowly been lifting lockdown restrictions, allowing more businesses and retailers to operate, and as a result sales have rebounded from April's plummet of 49.9% when lockdown was still at level 5. May's sales had declined by 11.5%. 

Retail sales for the second quarter of the year are down 22.8%, compared to the same quarter last year.

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