Mastercard SpendingPulse shows a significant increase in retail spending in December 2017 as consumers benefit from a stronger Rand and lower inflation
Johannesburg, South Africa, 9 February 2018 – Mastercard SpendingPulse today reports that South African consumer spending showed a healthy improvement over the festive season, with retail sales volumes rising 3.8 percent year-on-year after removing the effects of inflation. This marks the strongest monthly performance for South African retail spending since May 2013.
The latest SpendingPulse South Africa report details holiday shopping in December 2017 and covers retail sales across all payment types, including cash and cheque.
Including the effects of inflation, retail sales for December 2017 grew 7.5 percent year-on-year. Inflation contributed just 3.7 percentage points to overall sales growth, which marks a significant deceleration in price inflation, bringing consumers much needed relief over the holiday season.
“The spike in consumer spending during the holiday season took retail sales to new highs,” says Sarah Quinlan, Senior Vice President Market Insights for Mastercard. “Sturdier GDP growth, a lower inflation outlook and the stronger Rand, which in turn drove down import prices - all benefited consumers over the holidays.”
Key findings of the Mastercard SpendingPulse South Africa December 2017 include:
- Pharmaceuticals, Medical Goods, Cosmetics and Toiletry sales climbed 6 percent year-on-year, after adjusting for inflation, showing the strongest growth the sector has seen in a year thanks to lower import prices.
- Price inflation in clothing and footwear fell to its lowest since 2012, while food and beverage prices rose at the slowest rate since October 2015.
- The General Dealer sector – which includes food and other day-to-day essentials - grew a mere 0.9 percent year-on-year when the effects of inflation are excluded. Though growth remained slow in this sector, this was the first December period since 2013 to see positive growth in general dealer sales volume.
“The price index for General Dealer sales continued to rise at a quicker pace than total retail sales, largely due to faster growth in food prices in the wake of an enduring drought,” says Quinlan. “Consumers hit by high Christmas food prices cut back on meat purchases and were less inclined to splurge on discretionary goods, instead searching for deals and promotions.”
Mastercard’s SpendingPulse 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 (NYSE: MA), www.mastercard.com, is a technology company in the global payments industry. Our global payments processing network connects 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.