According to newly released data, South Africa’s retail sales has grown at a slower rate in January. The rising inflation and higher lending rates are seen as the major reasons for the the weakening economy. The sales of household furniture and appliances slowed sharply, growing 2.6 percent year-on-year in January against 6 percent in the previous month. Sales of general goods and pharmaceuticals also stumbled.
Capital Economics analyst John Ashbourne said to Reuters: “While the weakness was widespread, it was most pronounced in durable goods, suggesting that consumer confidence is slipping,”
The figures also revealed a decrease in money spend on home improvements which according to analysts indicates a shift in consumers’ priorities away from big-ticket items in favour of cheaper goods. According to the government figures the economy is growing at 0.9 percent in 2016. But some analysts are expecting growth of about 0.5 percent.
Many analysts expects the Africa’s most industrialised economy to narrowly avoid a recession. Analysts said consumers were shifting their spending to smaller goods such as cellphones, purchased at smaller all-purpose stores. Africa’s largest grocer Shoprite, considered a barometer of lower-tier spending, posted an 8.9 percent rise in half-year profit in February, as cash-strapped consumers increasingly turned to cheaper, no-frills retailers.