Johannesburg – Growth in South Africa’s retail sales braked sharply to 1.0% on a year-on-year basis at constant prices in April, compared with a revised 6.7% in March, Statistics South Africa said on Wednesday.
Stats SA said the year-on-year figure was coming off a relatively high base.
“Retail sales were boosted in April 2011 by the concentration of public holidays in late April and early May 2011 and additional school holidays after the Easter weekend,” it said in statement.
On a monthly basis, sales were at 1.5% in April and rose by 4.7% in the quarter to April compared with the same period a year ago – also at constant prices.
Economists polled by Reuters expected year-on-year sales growth to ease to 4.5% in April.
Peter Attard Montalto, economist at Nomura said: “Most of the weakness appeared to come from durable and semi-durable related goods.
“This first print for Q2 shows for me that the sharp turnaround in the labour market in Q1 is now feeding through much more meaningfully into consumption.
“This number reinforces our very sub-consensus GDP (gross domestic product) forecast of 1.7% for this year on a much earlier turnaround in domestic demand in the economy and remains a necessary though not sufficient nudge to the South African Reserve Bank to cut in September.”
Said Johannes Khosa, economist at Nedbank: “It’s a very bad number. We were expecting it to increase by 4.1%.
“It continues to provide further evidence consumer spending is likely to moderate during the second quarter of this year.”
The rand weakened to R8.4150 against the dollar at 11:10 GMT from R8.40 before the data was released at 11:00 GMT. The yield on the 2015 benchmark bond was at 6.185% from 6.195% prior to the data.
Growth in sales averaged 6.1% last year compared with 5.1% in 2010 – creeping up in the last half of 2011.
Analysts expect sales to moderate this year as consumers decrease non-essential spending, as higher fuel and food costs make consumers more cautious.
A 25% unemployment rate is also likely to hamper any robust sales in retail stores.
Consumer spending boosted economic growth in the third and fourth quarters of 2011 as demand-related sectors grew. The central bank has left interest rates at three-decade lows of 5.5% to help boost economic growth.