The dangers of SA’s trickle-down effect in recovery – a retail view
On average, South Africans are spending just under a half a percent more per annum than they were a decade ago; add inflation and the net result is that most of us are much poorer. Of course, that's all relative to how much you earned to start with. A billionaire or multi-millionaire won't feel it much, but your 'average' citizen will probably avoid buying hardware and homeware, unless forced to by circumstance. This analysis of retail trade sales shows how the worsening economy (in spite of a more recent, hope-inducing bounce back) has impacted, driven by government budget allocation mismanagement, Covid-19, long-standing corruption and populist and poverty-driven unrest. The basics of the economy remain strong, enabling some recovery, but the relief cannot come soon enough for the growing jobless army, which needs every possible barrier to employment removed. The hypocrisy of the government allowing itself exemption to the minimum wage requirements simply emphasises one such barrier. – Chris Bateman
Analysis by Douglas Parker Associates
Statistics South Africa has published the latest in its regular monthly series on retail trade sales, providing its estimates of results to the end of December 2021, based on surveys of retail operators.
Total sales for the calendar year topped R1,166bn, representing growth for the year of 8.7% in current prices and 5.7% in constant 2015 prices. This is a welcome result after the devastation of 2020 and shows a strong bounce back despite the unrest and looting that occurred in July.
The pandemic and the associated lockdowns and prohibitions resulted in an unequal impact on the various retail categories, with the greatest effect being felt by 'all other goods' as well as clothing and footwear, as illustrated in the following two graphs.
The first graph highlights the relative growth over the past seven years for each of the major merchandise groups, while the second highlights the bounce back from 2020 to 2021.
Hardware and homeware have shown little growth over the past six years. Other goods, which includes toys, stationery, sports goods and jewellery was showing strong growth but suffered the worst with the pandemic.
Reviewing growth over the past decade, it is disappointing to note that total retail sales by head of population have grown very little over this time; by 3.86% PA in current prices and 0.44% PA in real terms between 2011 and 2021.
The final chart below shows the composition of the retail market by major category in terms of their share of consumer expenditure.
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