GROWTH in South Africa’s retail trade sales was much weaker than expected in October‚ indicating softer employment growth and the pressure under which consumers find themselves as costs rise.

Retail trade sales increased by 1% in October compared with a year earlier, following an upwardly revised 4.7% year-on-year increase in September‚ Statistics South Africa said on Tuesday.

Rand Merchant Bank economists pointed out in a note released earlier the "headwinds facing the consumer", one of which it said was a "moderation in employment growth".

The 1% retail sales increase was well below the market consensus for a 4% year-on-year rise, with the rise coming mainly from increases in household furniture, appliances and equipment retailers; retailers in textiles, clothing, footwear, and leather goods; and general dealers, who all contributed 0.3 percentage points.

Absa Capital economists had expected "a slight narrowing" in retail sales due to "unfavourable base effects" as October 2011 had more weekends than October this year.

Stanlib economist Kevin Lings said that while very volatile, retail sales were supporting other data that pointed to households’ slowing consumption expenditure.

"Inflation has moved up a bit and salary increases are not quite as strong as they used to be. Therefore incomes are under pressure. If incomes are under pressure, consumers cannot spend as much," Mr Lings said.

Measured on a monthly basis, seasonally adjusted retail trade sales fell 1.7% in October following a 0.3% decline in September.

"There is no doubt that the consumer is losing momentum into the end of the year. We will likely have a softer Christmas this year compared with last year," Mr Lings said.

Stats SA figures also showed that the seasonally adjusted retail trade sales rose by 1.6% in the three months ended October compared with the previous three months, and rose by 4.1% in the three months ended October 2012 compared with the year-earlier period.