Retail sales in South Africa disappointed in July, backtracking on some of the ground recovered in the previous month, and underscoring the long road to recovery lying ahead for the sector.
Retail sales contracted 9 percent year on year in July, worse that the minus 5 percent expected in a Bloomberg poll of eight economists, and a sharper contraction than the revised 7,2 percent fall reported in June. The figures come as consumer confidence is at its lowest levels since 1993, despite a partial recovery off the historic trough recorded in the second quarter, and highlighting the stresses households still face as they navigate the fallout from the Covid-19 lockdown.
“I think it’s quite reflective of weak consumer sentiment in SA,” said Sanisha Packirisamy, economist at Momentum Investments, adding that the drivers that typically support consumer spending, including income levels, employment and confidence, all face headwinds.
“Income levels are generally down, anecdotally we know there have been significant pay cuts in areas of the economy,” she told Business Day.
The most recent data from the BankservAfrica take-home pay index, for the month of June, suggested a 20,7 percent decline in monthly payments from a year ago. — Businessday.com