According to an Ernst and Young and Bureau of Economic Research retail survey, South Africa’s retail sales volumes have been on a downward trend since the first quarter of 2014.
“I think one of the more interesting observations is that it’s been a while since we’ve seen this broad-based decline in volume growth affecting all parts of the retail sector. In previous years we’ve had certain parts of the retail economy fire on different cylinders,” Derek Engelbrecht, retail and consumer product sector leader from Ernst and Young, told CNBC Africa.
“It’s the first time in a while that we’ve seen a general gloomy mood on all of those sectors, or reported at the same time by their respondents.”
Engelbrecht added that there were a number of factors impacting the retail industry, but the basis points interest rate hike in January in particular has made the economy a lot more sensitive, and even gloomier than it was previously.
(READ MORE: South Africa's 2014 economic growth seen below potential)
“If one thinks about disposable income growth, [the growth is] just not there. Some of the unsecured credit extension, the tap’s been turned off in the last two or three quarters,” he explained.
“Just generally, consumer confidence levels being at historic lows tend to place a dampening mood on all of those sectors all at once.”
Employment and employment opportunity figures are equally dim, and growth is slower than required.
(READ MORE: S.Africa's GDP growth reduced to 2.1 per centin 2013)
“If I look at the people that we interact with in the market, by and large, I have not seen a significant increase in levels of employment. I think where businesses are losing people through attrition, they end up thinking very hard [about] replacing like for like,” said Engelbrecht.
“They are thinking very hard how they could lift the level of productivity of the remaining workforce to cover for that natural attrition in the short term. There is no doubt that everybody wants to employ more people in a growth story.”