Retail sales in South Africa experienced a slight slump in July for the first time in four months due to the civil unrest and riots that engulfed KwaZulu-Natal and parts of Gauteng during the month. Picture: Itumeleng English/African News Agency(ANA)
Retail sales in South Africa experienced a slight slump in July for the first time in four months due to the civil unrest and riots that engulfed KwaZulu-Natal and parts of Gauteng during the month. Picture: Itumeleng English/African News Agency(ANA)

Slight slump in SA retail sales in July due to civil unrest

By Siphelele Dludla Time of article published Sep 16, 2021

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RETAIL sales in South Africa experienced a slight slump in July for the first time in four months due to the civil unrest and riots that engulfed KwaZulu-Natal and parts of Gauteng during the month.

The civil unrest knocked the retail sales performance as stores were looted and vandalised, resulting in prolonged closures as a precautionary measure and to rebuild.

Statistics South Africa (StatsSA) said yesterday that retail trade sales fell by 0.8 percent year-on-year in July.

This slump followed an upwardly revised 10.5 percent growth in retail sales in June.

This was the first decrease in retail activity since March as the recent violent events disrupted supply chains and business activity across the country.

Nedbank senior economist Nicky Weimar said the recovery in retail sales was derailed by the lockdown restrictions and the civil unrest in July as expected.

“Over the medium term, the impacts of these events will probably linger until businesses are restored to full capacity,” Weimar said.

“Significant improvements on the jobs front and the ability to limit strict restrictions on economic activity will be vital in rebuilding demand in the economy.

“Progress on vaccinations and favourable interest rates will also offer support to the sector’s recovery,” Weimar said.

Retailers will be hoping that the usually busy festive season shopping will pick up after the country’s lockdown restrictions were eased further to alert level 2, allowing for more economic activity.

StatsSA’s deputy director for distributive trade statistics, Raquel Floris, said that four of the seven retail categories in South Africa recorded negative results in July.

The largest negative contribution to the headline reading stemmed from the general dealers’ category, owing to its substantial weighting in the retail basket.

“Household furniture, appliances and equipment recorded the largest negative growth rate, with sales declining by 10.2 percent,” Floris said.

“The second largest decline was recorded by hardware, paint and glass, registering a 6.2 percent year-on-year decrease in sales.

“Retailers in food, beverages and tobacco also performed poorly in July, but on the upside retailers in pharmaceuticals and medical goods recorded positive year-on-year results.”

On a monthly basis, retail sales plunged 11.2 percent in July after an upwardly revised 0.7 percent in June.

Retail sales were 2.9 percent lower for the three months to July than the previous three months, but were up by 8.4 percent compared to the same three months a year ago, mainly due to base effects.

Investec economist Lara Hodes said the headwinds for the retail sector were not completely over as certain factors could still affect trade in the months ahead.

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