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Monday, 11 December 2023 19:58

Retailer confidence edged up in the fourth quarter - BER's latest survey shows.

By Lehlohonolo Lehana.

The Bureau for Economic Research's (BER) latest Retail Survey, released on Monday, shows retailer business confidence recovered during the fourth quarter of 2023.

The BER said that the improvement in confidence appears to be driven by improvements in profitability and general business conditions – with load shedding improving at the time of the survey – instead of sales growth.

Respondents in the non-durable goods retail sector (e.g., food, beverages, groceries, cosmetics and pharmaceuticals) said that sales volumes were significantly lower compared to the 2022 holiday season.

Purchasing and selling price inflation remained high in the sector, even if it was slower compared to the first half of the year.

The avian flu outbreak also caused egg prices to surge, interrupting the downward trajectory of food inflation during Q2 and Q3.

Lower levels of load-shedding, combined with the increased utilisation of solar power would have reduced the need to run expensive diesel generators and likely boosted profitability. This, in all likelihood, bolstered non-durable goods retailer confidence”, noted Craig Lemboe, deputy director at the BER.

Durable goods (e.g., furniture and hardware) retailers also saw lower sales volumes compared to last year, even if hardware sales improved relative to a very weak Q3 2023.

The hardware sales growth was likely due to recovery in the building industry as well as repairs done by homeowners in the Western Cape following the damage caused by the September floods.

Although there was sustained high durable goods purchasing price inflation due to the rand’s weakness, durable goods retailer selling price inflation eased.

"Black Friday sales were no doubt used to entice customers in a sector that is currently strained by high interest rates and cost-of-living pressures, "said Lemboe.

Semi-durable goods (e.g., textiles, clothing, footwear, sporting equipment and toys) retailers continued to see positive volume growth over the Christmas period and were the only sector to see higher sales volumes compared to a year ago.

That said, there was a drop relative to Q3 when the sale of Springbok-related merchandise boosted sales volumes.

Clothing and footwear retailers said that congestion at the South African ports led to the late arrival of their summer ranges, affecting sales in the summer holidays.