While the sector is
expected to remain muted, end-of-year sales and Black Friday are set to drive
retail sales higher in the fourth quarter

In the third quarter of 2017, seasonally adjusted retail trade sales were up by
1.4% (about R220bn) compared with the second quarter while the retail sector
did better than expected in September with an increase of 5.4% year on year.

“Economic growth has been sluggish and is adversely impacting growth in
the retail sector. However, retailers are adjusting to the challenging
environment, and they are also getting better at delivering the right deals for
cash-pressed consumers,”
Boston Consulting Group MD Stefan Salzer said.

“As consumers become more price- and value- conscious, the key to winning
them over is having the right price and promotions strategy in place in the
build-up to the festive season and the new year.”

Portfolio manager at Cratos Wealth Ron Klipin said low volume growth was an
issue. “So affordability is the central theme under these dire economic
times. Retailers like Mr P, Ackermans and Pep are leading the pack and filling
this niche.

“Loyalty programmes and specials will go a long way in driving volume.

“It is always prudent to diversify sources of income geographically, so
acquisitions in foreign territories can be useful in staving off risk associated
with currency and micro economics,”
he said.

Stanlib economist Kevin Lings said that many retailers across a broad range of
categories were still offering bargains or specials.

Source: Business Day