Retail sales rise in 2000 despite growing competition

Posted On Thursday, 08 March 2001 03:01 Published by
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RETAIL sales growth showed improved strength last year, despite rising competition for the consumer's rand from cellphones, the lottery, widespread electrification and the surge in oil prices.

RETAIL sales growth showed improved strength last year, despite rising competition for the consumer's rand from cellphones, the lottery, widespread electrification and the surge in oil prices.

Statistics SA reported yesterday that retail sales grew 3,5% in real terms last year, compared with 0,3% the previous year.

Actual final-quarter sales rose 3,9% on the previous last quarter. But retail sales growth in December dropped 0,4% on a seasonally adjusted basis.

Retail trade sales, an important barometer of demand and growth prospects for the economy, have trended upward for the most part since 1999.

More intense competition in certain retail fields such as clothing has placed increasing pressure on margins.

Competition for the consumer's rand, mainly as a result of the rapid growth in the cellphone market and the lottery, eroded the sales growth rate of many retailers.

Statistics SA reported yesterday that domestic appliances was the sector with the fastest growth in sales last year, with a 12% growth rate.

Household furniture was not far behind, at 11,3%. Glass, crockery, cutlery and kitchenware was up 10,8%, and the men's and boys' clothing and accessories category grew 9,4%.

However, sales in the jewellery category were down 8,8% and those of footwear dropped 3,2%. The quarterly data showed growth in 10 of the 19 sales categories.

Consumer confidence is expected to be given a boost by the R8bn in tax cuts in the budget presented to Parliament last month.

Standard Bank in its analysis of the budget said that the budget was neutral to slightly positive for consumers, 'which means that retailers should not expect customers to be pounding at their doors in the short term'.

However, the bank says that the retailer sector could benefit over the longer term from sound economic policy.


Publisher: Business Day
Source: Business Day

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