Slump in retail sales paints a bleak picture
Retail sales during January shrunk by 2.3%, the biggest monthly contraction since the 2000 recession.
A Woolworths store. Picture: Gallo Images/ Die Burger/Stephen James Williams
If there was ever any doubt that South Africans are poorer than they were at this time last year, this is given the lie by the release of the January retail sales, one of the key pointers to the vibrancy of the national economy.
Retail sales during the month under review shrunk by 2.3%, the biggest monthly contraction since the 2000 recession and a dire warning for retailers for the rest of the year.
For quite apart from the tumbling numbers, any drastic fall in the index signals a direct correlation with the confidence that things will improve, linked directly to South Africans reaching into their wallets.
There are a number of aspects to this subtle loss of confidence: the unemployment rate and a looming fear of retrenchment; the escalating burden of debt carried by the average consumer; January traditionally being a tough trading month; and the pressure of ever rising prices are almost certainly chief among them.
It is also more than likely that this situation is set to continue with the retail sector – a source of major employment – being caught in the squeeze and in a worst-case scenario, having to implement cutbacks.
Unless the cash starts pouring in again, there are no winners.