Black Friday fails to lift November retail trade, sales fall 0.9% year on year

South African consumers in November seem not to have been inspired to open their wallets on Black Friday. Statistics South Africa said retail trade sales fell 0.9% in November on a year-on-year basis.



The data also showed that in the three months to the end of November, sales were down 0.5% compared to the previous three months. 

If that trend continues, retail trade will be a drag on the fourth quarter gross domestic product read, raising the odds that the economy tipped into a recession after contracting 0.2% in the third quarter. 

The one brightish spot was that sales were up monthly by a marginal 0.4% after a 1.4% decline in October. But that’s still far from shooting the lights out.

Aside from the usual suspects constraining consumers – the high interest rate and inflation environment, combined with globe-topping rates of unemployment – the snarl-up at the ports caused by Transnet’s mounting dysfunction also played a role.

“Some clothing and footwear retailers noted that congestion at South African ports led to the late arrival of their summer ranges in recent months, adversely affecting sales in the run-up to the summer holidays,” says the BER’s latest retail survey.

Investec economist Lara Hodes says this helps explain the 2.0% year-on-year decline in sales of textiles, clothing, footwear and leather goods – a stark contrast with buoyant annual growth of 11.2% in August and 13.5% in September.

Other indicators have also painted a grim picture for consumption. The FNB/BER Consumer Confidence Index edged down to -17 in Q4 last year  – its lowest festive season reading in over two decades. 

Still, the outlook is not all doom and gloom. 

“Consumers should benefit from the slowing inflation trend, positive employment gains, and the extension of the Social Relief of Distress grant. 

“In addition, the contemplated, albeit modest, interest rate cutting cycle should help support spending on discretionary items. This should see household consumption expenditure lift from the estimated 0.8% y/y in 2023 to around 1.5% in 2024,” Siphamandla Mkhwanazi, FNB senior economist, says. 

So Black Friday in 2024 may not be so bleak – provided the port logjams have been sorted out by then. DM