Clothing is the best-performing retail sector in June - Mastercard SpendingPulse™ Report
Johannesburg, South Africa – 15 August 2018 –South African retail sales for June 2018 grew by 2.9 percent year-on-year excluding the effects of inflation, marking the weakest pace of growth since October 2017. This is according to the Mastercard SpendingPulse June 2018 report, which provides a macro-economic analysis of retail spending trends in South Africa.
June’s retail sales volume was slightly below the three percent year-on-year gain recorded in May 2018 and signals the third consecutive month that the rate of growth has decelerated in South Africa’s retail sector. Total retail sales growth, including the effects of inflation, grew 5.8 percent year-on-year.
“While real spending in the retail sector remains in positive territory, we did see the rate of growth continue to slow in June. Retail price inflation also ticked up for the first time in a year, after bottoming out in May. This may further weigh on consumers in the coming months as they already face tight wallets due to weak wage growth and rising unemployment,” says Michael McNamara, Senior Principal, Data and Services at Mastercard.
“Slowing GDP growth in the first quarter, rising fuel prices and a strengthening US dollar also contribute to a challenging macro-economic environment,” McNamara says.
Clothing was the best-performing segment of the retail market in June, with sales excluding the effects of inflation rising 4.4 percent year-on-year. Overall, June sales were 8.4 percent above average for this time of year. Sales including the effects inflation were also up, growing 6.3 percent year-on-year.
The Pharmaceutical, Medical Goods, Cosmetics and Toiletry category once again performed well with sales excluding the effects of inflation growing 4.2 percent year-on-on-year for June 2018. Including the effects of inflation, sales grew 7.2 percent, meaning that inflation contributed only three percentage points to growth, compared to 3.6 percentage points in May.
In the Food and Beverages sector, sales excluding the effects of inflation grew 3.8 percent year-on-year in June, showing an improvement over the 1.5 percent growth rate of the first quarter in 2018. Sales including the effects of inflation grew 8.9 percent.
Confirming a trend evident in most months of 2018, the General Dealer sector once again underperformed the rest of the retail market. General Dealer sales volumes excluding the effects of inflation fell 2.9 percent year-on-year for June 2018. Including the effects of inflation, General Dealer sales rose 3.6 percent year-on-year.
“As the benefit from lower food and oil prices runs its course, growth in consumer spending is expected to face an additional headwind from a higher value-added tax, which increased from 14 percent to 15 percent in April,” says McNamara.
Mastercard SpendingPulse South Africa reports on national retail sales and uses aggregated and anonymous Mastercard transaction data, coupled with survey-based estimates for other payment forms including cash and cheque. Reports are released monthly to subscribers ahead of other sources, providing timely, accurate, and unbiased insight into the South African economy. The report also includes an overall retail sales and price index to illustrate whether spending growth is being driven by increased shopping, inflation or increased promotions.
About Mastercard SpendingPulse
Mastercard SpendingPulse reports on national retail sales and is based on aggregate sales activity in the Mastercard payments network, coupled with survey-based estimates for certain other payment forms, such as cash and cheque. SpendingPulse reports and content, including estimated forecasts of spending trends do not in any way contain, reflect or relate to actual Mastercard operational or financial performance, or specific payment-card-issuer data. SpendingPulse is provided by Mastercard Advisors, the professional services arm of Mastercard.
About Mastercard Advisors
Mastercard Advisors, the professional services arm of Mastercard, provides clients around the world with insights and solutions that drive business impact and ROI. The company uses advanced analyses and deep expertise in the payment field to translate data into market behavior and customized services. With over 80 billion transactions processed annually in 210 countries worldwide, Mastercard Advisors uses aggregated information and a consultative approach to help financial institutions, merchants, media companies, government and organizations of different sizes to boost their businesses. For more information, access www.Mastercardadvisors.com.
Mastercard, www.mastercard.com, is a technology company in the global payments industry. We operate the world’s fastest payments processing network, connecting consumers, financial institutions, merchants, governments and businesses in more than 210 countries and territories. Mastercard products and solutions make everyday commerce activities – such as shopping, traveling, running a business and managing finances – easier, more secure and more efficient for everyone. Follow us on Twitter: @MastercardMEA and @MastercardNews, join the discussion on the Beyond the Transaction Blog and subscribe for the latest news on the MEA Engagement Bureau.
Mastercard Communications Contact