Another bleak Christmas?

Experts say there is some recovery relative to last year but it is rather lower than anticipated.

Pick n Pay this week reported results scarred by the toughest trading conditions in the history of the group.

Nick Badminton, Pick n Pay's chief executive, said consumers were under pressure; they were shopping more frequently but buying less.

AVI, a producer and distributor of consumer goods, including food and cosmetics, also lamented the sluggish recovery - although in a statement to the market this week, it said it expected sales to be 7.7% better than in the previous period.

On a brighter note, health and beauty products retailer Clicks reported a 27% hike in annual diluted headline earnings per share.

Abri du Plessis, chief investment officer at Gryphon Asset Management, cautioned that Clicks' growth came off a low base. He forecast a "bleak" Christmas for retailers in the absence of a turnaround in consumer confidence. "I don't think we are out of the woods yet."

He said the Reserve Bank should cut rates to a level that was on a par with SA's trading partners.

Badminton said job losses and the public sector strike had had an effect on spending as "people have less money in their pockets".

Kgotso Radira, an economist at Investec, said: "While consumer confidence has improved relative to a year ago, consumers remain hesitant about spending. The latest quarterly bulletin showed that household debt levels are still elevated and the deleveraging process still has a way to go. This does not bode well for the recovery in spending,"

Source: Sunday Times