Retail trade seen at 7.4% in June

Economists say the lagged benefits of lower interest rates are filtering through into boosting consumer spending as households find that their financial position has improved, though the World Cup has been a major factor behind the recent increases and the levels of growth may not last.

Broad growth

Analysis of the breakdown of growth in sales suggests that the improvement took place across a broad front, including both durable and non-durable goods and was not confined to clothing, wholesale sales might have expected to have been boosted.

Lagging the considerable improvement in the growth of the food, beverages and tobacco wholesales to 6.7% y/y in May, following four consecutive months of decline, a considerable rise in retail sales in June is expected, largely concentrated in the specialised food and beverages, general dealer and other retailers in the month.

Only 'temporary'

Nevertheless, one economist says the sharp improvement is expected to be temporary, with retail sales growth expected to correct to lower levels after July.

And another adds that while World Cup spending aided sales in May and June, a slippage in retail spending towards the back end of the year is plausible.

The 4.6% of May marked the highest growth in retail sales in 27 months.

The June retail trade sales data will be released by Statistics South Africa at 11.30am on Wednesday, 18 August.