Shock April retail sales crash after VAT increase
April’s increase in VAT and fuel prices knocked retail sales growth down to a ninth of the 4.5% expected by economists.
Statistics SA reported on Wednesday that annual retail sales growth decelerated to 0.5%‚ sharply down from March’s originally reported 4.8%. Stats SA revised the March figure down to 4.6%.
"Today’s figures are disappointing‚ particularly given that consumer spending accounts for just over 60% of GDP‚" Nedbank's economic unit said in an e-mail.
In current prices‚ Stats SA reported April’s total retail sales came to R80bn‚ down from R83bn in March. Stats SA uses constant prices set to 2015 to strip inflation out of its retail growth figures.
General retailers‚ which account for 41% of total retail sales‚ suffered a 1% annual decline to R29bn. Clothing retailers‚ the second largest category contributing 18% of the total‚ suffered a 0.5% sales decline to R13bn.
Pharmacies‚ which contribute 8% of the total‚ grew sales 6.2% to R6bn. Furniture stores did best‚ growing annual sales 11% to R3.3bn‚ or 5% of the total.
Said FNB chief economist Mamello Matikinca‚ "The April print is an important one‚ not only because it represents the first month of the second quarter‚ but because it will be the first month to reflect the impact of VAT and fuel price increases on consumers’ pockets."