By Lehlohonolo Lehana.
South African retailer confidence fell sharply in the third quarter, according to the latest survey by the Bureau for Economic Research (BER).
The BER said retail confidence dropped to 32% in the third quarter from 42% in the second quarter of 2025.
This dramatic 10-point nosedive marks the first time confidence has fallen below the long-term average of 40% in over a year, dragging sentiment back to the gloomy levels seen at the start of 2024, the survey revealed.
Notably, while retailers are showing clear signs of stress and worry, overall profitability in the sector is still quite favourable, the BER said.
This means that businesses in the sector are anticipating trouble to come in terms of consumer demand, likely from the continued high interest rate environment, which is putting pressure on indebted households.
“Over the past year, retailers’ confidence has been much better than in the first half of 2024,” the BER said.
“However, it appears the pendulum is swinging in the opposite direction for the second half of 2025.”
The BER’s survey results suggest volume growth in the retail and wholesale sectors likely moderated during 2025Q3, pointing to a slowdown in the consumer demand environment.
This is an expected outcome as many tailwinds to consumer spending over the last few months, two-pot withdrawals and low inflation are set to provide less support in the second half of 2025.
Looking at wholesales, after five quarters of outperformance, confidence in this sector lost ground, declining from 50% to 38%.
The business conditions of wholesalers ticked up, but remained just below the long-term average, signalling a challenging operating environment, the BER said.
Statistics South Africa retail sales data for July 2025, however, showed that retail trade sales jumped by 5.6% year-on-year, with hardware, paint and glass retailers leading the charge with a robust 13.2%.
This was in real terms, which Statistics South Africa uses as its measurement, benchmarking prices without inflationary effects against 2019 to gain a better picture of actual sales.
Clothing and footwear retailers also gained strongly, with a solid 10% increase, while general dealers added 3.3%.
The BER survey indicates that furniture retailers and new vehicle dealers remain bright spots in an otherwise gloomy trade sector, suggesting some consumers – particularly higher-income earners – are still opening their wallets even as the broader market tightens its grip.