Retail trade figures drop by 4.5%

According to Stats SA, sales dipped an annual 4.5% compared with a revised 1.2% gain in January.

The drop came despite the 100 basis point cut in the repo rate announced by Reserve Bank Governor Tito Mboweni last month.

Senior economist at Nedbank Nicky Weimer told BuaNews the drop in retail sales was not surprising as households were concerned about their spending.

“This was not really unexpected. We know that households are under financial stress. We have seen a spate of retrenchments (due to the start of the global financial crisis) so job security is of concern.

“People are weary to spend because they don't know what the future holds, their sense of wealth is seriously eroded,” said Weimer.

Nedbank predicted that retail trade sales would continue falling. “It will continue to contract for much of the year, we have it recovering towards the end of the year,” she said.

According to Stats SA, the country's retail trade sales at current prices for the three months ending in February this year increased by 10.8% compared to February last year.

This growth was due to the increase in general dealers, retailers in textiles, clothing, footwear and leather goods among other things.

Household furniture, appliance and equipment retailers contributed negatively to the change in retail trade sales.

Article published courtesy of BuaNews