Mastercard SpendingPulse report shows total retail sales volume growing at quickest pace in five years
Johannesburg, South Africa, 15 May 2018 – Total South African retail sales for March 2018 grew by four percent year-on-year after removing the effects of inflation, marking the highest growth rate for retail spending since May 2013. This is according to the Mastercard SpendingPulse March 2018 report, which provides a macroeconomic analysis of retail spending trends in South Africa.
March’s retail performance rounds off a strong first quarter for the South African retail market. SpendingPulse data shows that total monthly retail sales for the first quarter of 2018 grew by an average of 3.8 percent year-on-year, compared to the monthly average of 3.3 percent for the fourth quarter of 2017.
With the effects of inflation included, retail sales for March 2018 grew seven percent year-on-year. The difference between retail sales, with inflation included and inflation excluded, was three percentage points, the lowest level since March 2013.
“The shrinking gap between retail sales, with inflation included and without inflation included, indicates we are starting to see real growth in the South African economy and retail sector,” says Sarah Quinlan, Senior Vice President and Group Head of Market Insights for Mastercard. “Lower inflation in key economic sectors, paired with rising business and consumer confidence, have helped boost consumer spending on discretionary items like cosmetics and toiletries.”
Key findings of the Mastercard SpendingPulse South Africa March 2018 report include:
- Pharmaceuticals, medical goods, cosmetics and toiletry retail sales, excluding the effects of inflation, climbed 3.4 percent year-on-year in March 2018. With inflation included, sales increased 7.9 percent over 2017. Higher prices contributed 4.5 percentage points to sales growth. Though still high, this reflects the smallest gap between sales, including and excluding inflation seen since September 2016.
- The general dealer sector, which includes food and other daily essentials, showed tepid growth for a 17th consecutive month, with inflation-adjusted sales growing only 0.2 percent year-on-year in March 2018. Including the effects of inflation, this sector showed sales growth of 6.7 percent year-on-year for the month. Though inflation is falling in this sector, its effect is more pronounced here than in other segments of the market.
“A stronger rand and a continued recovery from the drought in many parts of the country helped to alleviate inflation pressures. Food prices rose in line with the consumer price index (CPI), after climbing faster than CPI for each of the past 28 months,” says Quinlan. “In April, we will begin to see how the one percentage point increase in VAT will impact consumer spending and retail sales.”
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.
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