Consumers won't splash the cash, yet

By Staff Writer

While retail sales might have increased in February for the first time in more than a year, experts don't expect South Africans to start splashing the cash just yet.

It's expected that retail sales might have risen by 0.6% when compared to February last year after they took a dive by 1.7% in January according to a consensus forecast from both Reuters and Bloomberg.

"I think that retail sales should get stronger this year in line with other consumption indicators like vehicle sales, which are starting to run hard ahead of the Soccer World Cup," said Brait economist Colen Garrow.

"But the sustainability of the trend remains tenuous, as the economy is still undermined by the significant job losses last year. That will in turn hinder a more robust recovery in household consumption spending this year," he said.

The surprise interest rate cut by the Reserve Bank could motive consumers to spend more and with the World Cup around the corner, people will be spending on memorabilia, replica soccer shirts and other items to commemorate the event.

However, many households are still faced with heavy debt burdens following 2009's recession and job losses, these are all aspects which will constrain the sector.

Households who are still struggling with debt need to set up a budget and curb any excessive spending in order to get back on track and avoid further headaches.


"These factors first will have to improve before solid increases in retail sales can be expected," Standard Bank said last week.

Recent Articles

Featured Investing for your retirement – which product to use?

Retirement annuities (RAs) and tax-free savings accounts (TFSAs) - which is better when planning for your retirement?

3 Reasons for early entry to a retirement village

Your parents may envision their golden years on the porch of your childhood home. However, it’s good to look at the benefits of joining a retirement village.

What do activist investors aim to achieve?

If you had the financial means to invest in a company so that you can enact the change you want to see in the world, would you do it? There is a growing group of individuals who would, and these are known as activist investors.

Does installing a tracker reduce your insurance premium?

Installing a tracker can increase the safety of your car and track it in the event of theft and hijacking. But what kind of impact will it have on your insurance premiums?


Latest Guide

Guide to debt rehabilitation solutions