What Happened
Retail activity in South Africa continued its strong momentum, rising 7.7% year-over-year in November 2024, according to Statistics South Africa (Stats SA). This marked the ninth consecutive month of growth and the strongest increase since July 2022, surpassing market expectations of a 5.5% rise.
Why It’s Important
- Strongest Growth in Years: Excluding disruptions from COVID-19 and the July 2021 riots, this is the strongest retail growth print in nearly 14 years.
- Interest Rate Relief: The South African Reserve Bank’s (SARB) easing cycle has improved disposable income, driving higher consumer spending.
- Consumer Confidence: The Bureau for Economic Research reported record confidence levels among clothing, textiles, and footwear retailers.
Key Retail Trends
- General Dealers: Sales surged 11.9% YoY, leading retail growth.
- Clothing & Footwear: Increased 9.5% YoY, reflecting high demand.
- Household Furniture: Rose 9.4% as consumers invested in home goods.
- Food & Beverages: Up 3.8%, indicating steady consumer demand.
- Pharmaceuticals: Gained 3.7%, reflecting stable health-related spending.
- Hardware: Declined 4.3%, the only category to post a drop.
Market Outlook
FNB economist Siphamandla Mkhwanazi expects the positive momentum to continue in 2025, supported by higher household incomes, lower inflation, declining borrowing costs, and improving consumer sentiment.
BankservAfrica’s data showed a 10% rise in in-store card transactions on Black Friday (Nov. 29) and a 6% increase in online shopping, highlighting seasonal strength.
Standard Bank economist Dr. Elna Moolman cited key drivers behind the retail boom, including SARB’s interest rate relief, low inflation (sub-3% CPI), and lump-sum payouts from retirement reforms in September.
“We remain constructive about the consumer outlook, supported by persistently low inflation and further interest rate relief from the Reserve Bank,” Moolman added.