THE outlook for SA’s retail sector remains subdued, with slow economic growth made worse by drought, Consumer Goods Council of SA CEO Gwarega Mangozhe says.
The council represents thousands of the country’s retail, wholesale and manufacturing companies.
Growth in retail sales slowed significantly in June — to 1.7% year on year, compared with 4.5% year on year in May, Statistics SA data showed on Wednesday.
A weak rand had led to an increase in the fuel price and imported goods, putting pressure on costs for both retailers and consumers, Mangozhe said.
READ THIS: Retail sales growth hits low gear in tight times
The rand has, however, firmed recently as a result of investors’ global search for yield, and economists expect this to ease some of the cost pressures on importers.
While retailers and manufacturers were doing their best to contain price increases, elevated consumer indebtedness coupled with job losses in some sectors would continue to affect consumer spending, particularly on durable goods, Mangozhe said.
Despite the challenging environment, Mangozhe said the council remained optimistic about an upturn in the economy in 2017, "although much will depend on the outcome of various initiatives that the government has proposed to stimulate sustained growth".
Picture: THINKSTOCK
THE outlook for SA’s retail sector remains subdued, with slow economic growth made worse by drought, Consumer Goods Council of SA CEO Gwarega Mangozhe says.
The council represents thousands of the country’s retail, wholesale and manufacturing companies.
Growth in retail sales slowed significantly in June — to 1.7% year on year, compared with 4.5% year on year in May, Statistics SA data showed on Wednesday.
A weak rand had led to an increase in the fuel price and imported goods, putting pressure on costs for both retailers and consumers, Mangozhe said.
READ THIS: Retail sales growth hits low gear in tight times
The rand has, however, firmed recently as a result of investors’ global search for yield, and economists expect this to ease some of the cost pressures on importers.
While retailers and manufacturers were doing their best to contain price increases, elevated consumer indebtedness coupled with job losses in some sectors would continue to affect consumer spending, particularly on durable goods, Mangozhe said.
Despite the challenging environment, Mangozhe said the council remained optimistic about an upturn in the economy in 2017, "although much will depend on the outcome of various initiatives that the government has proposed to stimulate sustained growth".
