Retail sales increase by 8.3%

Pretoria – Retail trade sales in June has increased more than was expected by 8.3% from an upwardly revised 7.1% in June, Statistics South Africa (Stats SA) said.

Market expectation was that sales would rise by 4.7%.

Textiles, clothing, footwear and leather goods were at 16.4% as well as pharmaceutical and medical goods, cosmetics and toiletries were the major contributors to the increase, said Stats SA on Wednesday.

Measured in real terms, seasonally adjusted retail trade sales increased 1.9% in June compared with May. This followed month-on-month changes of -0.6% in May 2012 and 1.2% in April2012.

In real terms, retail trade sales for the second quarter of 2012 reflected an increase of 5.4% compared with the second quarter of 2011.

Nedbank economists said that despite an interest rate cut in July, high existing debt levels, tighter lending standards and rising cost pressures will continue to weigh on consumers.

“Our expectation is thus for consumer spending to lose momentum in the months ahead. Our forecast for household consumption expenditure growth for 2012 is 3.5%.

“The MPC’s next move will depend on whether the combined global monetary stimulus sparks some recovery later in the year (in which case rates will remain stable) or whether the global economy slips into recession (expect further easing),” said the bank. – SAnews