Retail trade sales set to improve

"Sales are likely to have improved over the month following an unexpected decline in February. Over the year, sales would have been helped by the continued consolidation in consumer confidence compared with last year on the back of low interest rates and inflation, as well as improving general economic "conditions," said Nedbank.

Statistics South Africa (Stats SA) is due to release the figures later today, Wednesday 19 May 2010.

Sales in February fell by 1.5% year-on-year. Nedbank expects the March figure to have improved by 0.6% year-on-year while market consensus forecast, according to Bloomberg, is that sales will improve by 0.2% year-on-year.

However, Standard Bank economist Shireen Darmalingam said the sector seems to be making a subtle turnaround after a bleak 2009.

"It is important to note that the sales momentum has improved as retail sales expanded by a seasonally adjusted 3.1% in the three months to February compared with the previous three months," she said.

According to the bank, encouraging signs that the economy is recovering from the recession are evident but the growth outlook for the sales environment remains weaker than in other sectors due to debt constraints hampering spending.

"Additionally high unemployment levels are acting as a considerable strain on consumers' buying power," said Darmalingam.