The main contributor to the rise was the 'textiles‚ clothing and footwear' sector‚ which grew by 14.3% y/y as Valentine's Day sales did well. On a monthly basis‚ total retail sales jumped by a seasonally adjusted 2.7% following a contraction of 1.7% in January.
Nedbank said that with the poor economic outlook and weak consumer confidence‚ they do not expect the strong rise in retail sales to be sustained for the rest of the year. Consumers are likely to be remain cautious about spending with moderate growth in household sales forecast for the coming months.
Absa Capital's Peter Worthington said the strength of retail sales in February was surprising given that the Bureau of Economic Research's consumer confidence index for the first quarter‚ which was mostly sampled in February‚ posted a sharp decline‚ taking the index to its worst levels in nearly a decade.
"Consumers were exceptionally pessimistic about whether it was a suitable time to buy durable goods. It is a little hard to square this release with our view that the economy is experiencing a sharp deceleration in consumer demand," he said.
Worthington pointed out that retail sales are inherently volatile‚ and too much cannot be inferred from any one single set of figures. He says the figures do not contain details on durable goods such as cars (where sales substantially backed off in February and March) or non-durable goods such as petrol.
"Moreover, the figures do not reflect the services sector, which accounts for 43% of total household consumption expenditure, and in this sector the rates of growth are flat," he said.
"In fact‚ the retail sales survey is based on just 35% of total household consumption expenditure," he added.
Standard Bank's Shireen Darmalingam was equally concerned that the February retail sales did not herald a revival in household consumption expenditure.
"We believe that consumers are likely to put the brakes on spending in the first half of this year. Real household disposable income is growing at a slower pace‚ and household debt levels appear to be slightly higher. This poses risks to overall household consumption expenditure‚ which accounts for 60% of GDP‚" she said.
First National Bank's (FNB) John Loos said although the February retail sales growth produced a "surprise"‚ this did not change FNB's 2013 forecast of average retails sales growth of between 2% and 3%.
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