Retail sales rose more than expected in January, data from Stats SA showed on Wednesday.
Sales grew 1.2% year on year, compared to December’s contraction of a revised -0.5%. This was well above market expectations for a 0.5% rise, according to a Bloomberg survey.
The data comes as grocery shelves in some areas were cleared out by panicked shoppers in the days after the announcement of containment measures to halt the spread of the coronavirus.
The better-than-expected increase notwithstanding, consumer confidence figures reported on Monday remain in the doldrums. Economists have warned that this could worsen amid Covid-19 fears, suggesting sales growth could face pressure in the coming months.
According to Stats SA, the main contributors to the 1.2% annual increase were “other” retailers (which includes online stores) and retailers in textiles, clothing, footwear and leather goods.
Meanwhile, retailers in household furniture, appliances and equipment grew an annual 6.2%; retailers in food, beverages and tobacco in specialised stores grew 4.4%; and “other” retailers grew 4.2%.
Month on month, seasonally adjusted retail sales increased 0.9%, Stats SA said. In the three months to the end of January, seasonally adjusted sales increased 0.4% compared with the previous three months.
Though SA’s retail industry has been battered by a weak economy and lacklustre consumer demand over the past year, the panic buying has been a boon to their embattled stocks in recent days.
The JSE food and drug retailers index, which had been down 22% in 2020 to date, notched up a 5% gain on Tuesday, Business Day reported, while shares for Shoprite, Woolworths and Pick n Pay all rose.
Firms such as Massmart and Pick n Pay have had to resort to shopping limits for customers, to prevent stock shortages.
Nevertheless consumer confidence in the first quarter of 2020 plunged further to -9 according to the most recent FNB/ BER consumer confidence index. With containment measures to curb the disease now under way, economists have warned that confidence could still sour, weighing on demand.
“We expect retail sales growth to come under some pressure over the coming months as businesses respond to the government’s measures contain the spread of Covid-19 and consumer confidence likely weakens,” Absa senior economist Peter Worthington said in a note ahead of the release.