Retail sales slump in Dec after Black Friday boost

South Africa’s retail sales slumped to their lowest in over a year in December after “Black Friday” discounts boosted the previous month, with sales by general dealers and of cosmetics and furniture the hardest hit as economic recovery continued to stumble.

Africa’s most industrialised economy emerged from a recession in the second half of 2018 after contracting in the first two quarters, but is set to expand slowly in 2019 with national elections in May keeping consumer confidence and activity subdued.

Retail sales fell 1.4% year-on-year in December after a 2.9% increase in November, while monthly sales contracted by 4.8%, the biggest fall since May 2011, the statistics office said on Wednesday.

Five out of seven of the categories showed contractions as consumers cut back on small and big-ticket items, dimming the prospects of President Cyril Ramaphosa delivering on his pledge to lift growth after nearly a decade of stagnation.

“It’s a big surprise. We know November sales were pushed up by Black Friday but we expected growth of at least two percent,” said economist at Nedbank Johannes Khosa.

“General dealers, which is the largest category and includes retailers like Game, Makro and Shoprite saw a substantial reversal. It seems consumers are opting to do all their shopping in November and cutting back over the festive holidays,” said Khosa.

Listed retailers have recently reported sluggish quarterly and half-year sales and earnings, as elevated household debt, higher fuel prices and an increase in value-added tax squeezed spending.