Retail trade sales fall in Feb

“Retail trade sales, at constant 2008 prices, for February 2010 reflected a decrease of 1.5% compared with February 2009,” said Stats SA.

Economists had predicted that the numbers would have improved in February.

“Obviously the figures were much weaker than what we and the market were expecting,” Nedbank economist Carmen Altenkirch told BuaNews.

She said that the data shows that consumers are still under financial strain.

“We may have seen a bounce in the Christmas season but people are still feeling uncertain about the outlook for the economy and prefer rather to pay down debt. There is reluctance for new debt,” she explained.

Market consensus was that the figure would show improvement of 0.6% year-on-year.

“Today's data is disappointing and surprising given that the economy was growing in the fourth quarter by 3.2%. The numbers are not looking good at the moment.

“It appears to me that while the economy is growing households are finding it difficult and are probably lagging behind the recovery by at least one quarter,” said Standard Bank senior economist, Dr Johan Botha.

However, both economists expect sales to pick up later in the year.

“There are signs that the economy is growing although not growing too fast we should see some improvement in the second quarter of the year,” said Botha.

Altenkirch said: “We should start to see improvement as 2010 progresses and the World Cup will support consumer spending. Some employment growth will also help.”