Sliding economy puts brakes on retail sales

Retail sales grew at their weakest pace in more than a year in April‚ signalling that consumer spending was under increasing pressure.

Retail sales grew 1.5% year on year in April‚ the weakest level since June 2014‚ according to Statistics SA.

A consensus forecast by global economic data collator‚ Trading Economics‚ had indicated that retail sales would grow 2.3% year on year in April

Retail sales‚ which include household furniture‚ textiles and hardware‚ grew at annual pace of 2.9% in March‚ down from 4% in February‚ suggesting that consumers were cutting back on spending as they struggled with high unemployment‚ rising living costs and higher interest rates.

The main contributors to the 1.5% increase in April were retailers in pharmaceuticals and medical goods‚ cosmetics and toiletries‚ which rose 8%.

The hardware‚ paint and glass sector contributed 5.4%.

“Consumer affordability has fallen in the current economic crisis‚ switching spending away from more expensive items such as new vehicles‚ in what is known as the lipstick effect‚” Investec economist Annabel Bishop said.

“In other words‚ buying luxury clothes‚ cosmetics or sports equipment‚ for example‚ instead of a new motor vehicle‚ although these retail sales categories are also beginning to suffer.”