1.5% growth forecast for retail industry

According to Prof Deon Tustin, BMR executive research director, its retail forecasts imply that the retail sector should move out of its recessionary conditions on the back of moderating inflation and a fairly low interest rate environment.

The lag effect of lower interest rates in 2009 is yet to reflect in the official retail sales figures in 2010. Whereas the 2010 FIFA World Cup could stimulate the retail trade environment in 2010, the event could also result in inflationary pressure, albeit only a temporary phenomenon.

Overall, retail trade inflation is anticipated to increase by 7.7%. According to Tustin, prices of footwear, men's clothing and sport and recreation items are anticipated to show the highest increase in 2010. At an estimated 7.7% average price increase in retail items for 2010, total retail sales are expected to amount to R6.4bn.

In 2010, total retail sales will probably conform to the seasonal trend followed in the past 10 years with roughly 48.2% of retail sales occurring in the first and 51.8% in the second half of the year.

The report, consisting of 102 pages, is available from the Bureau of Market Research, PO Box 392, UNISA 0003.