Cross-border shoppers sustain local retail sales

Lihle Z Mtshali

Lihle Z Mtshali

Sales growth at local retail outlets slowed dramatically in September, but could have been a lot worse without cross-border shoppers who buy goods in South Africa.

Statistics South Africa released the September retail trade sales data yesterday which showed that sales increased by a marginal 2percent, compared to the corresponding period last year.

Collen Garrow, an economist at Brait Merchant Bank, said the drop in domestic demand could be attributed to the effects of the National Credit Act and interest-rate hikes.

But, Garrow said shoppers who came from as far off as Somalia had helped to salvage sales figures.

Garrow said: "Cross-border shopping can't be measured conclusively, but a survey did find that migrant shoppers account for 2 percent of sales in the local retail sector."

He was referring to the Strategic Business Partnerships survey into foreigners who come to South Africa for short periods, with shopping as their main purpose.

Sales of R24,8billion were recorded in September from the revised R24,5billion recorded in August.

Stats SA said retail trade sales at current prices for the third quarter increased by 11,3percent compared with the third quarter of 2006. Furthermore, retail trade sales at current prices for September increased by 9,0percent compared with September 2006.

Stats SA said: "There are signs of the effect of the tightening monetary policy environment as the growth of 9percent is the first single digit growth since July 2005."