The slim improvement hints at the strikes which affected the second quarter.
Statistics South Africa reported retail sales volumes slumped from 2.8 per cent year on year (y-o-y) during 2014 Q1 to a mere 1.4 per cent y-o-y in 2014 Q2, the slowest volume growth since the end of the recession in 2009.
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Derek Engelbrecht, retail and consumer products sector leader at EY says the improvement in sales volumes was mainly concentrated in the hardware, paint, glass and semi-durable goods (e.g. clothing, footwear, sporting equipment, CDs and toys) retail sectors.
“Factors such as a dramatic slowdown in unsecured credit extension, waning disposable income growth and rising inflation have been weighing on retail sales volumes in general over the last two years, but the impact of these factors were compounded by the record long strike in the platinum sector during the first half of 2014,” read the report.
“To the extent that strike affected consumers were forced to postpone their purchases of hardware, clothing and footwear, the end of industrial action in the platinum belt may have alleviated some of the downward pressure on these categories during the third quarter.”
The EY/BER survey results also showed that non-durable goods sales volumes (food, beverages, tobacco products, cosmetics and pharmaceuticals) and furniture and household appliances remained under pressure during 2014 Q3.
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“Furniture and household appliances sales volumes have been particularly hard hit by the slowdown in unsecured lending, coupled with the inflationary impact of the dramatic depreciation in the rand exchange rate on imported goods,” said the EY report.
The report added that consumer spending in non-durable goods has been constrained by poor job creation, loss of income due to strikes, slower growth in social grants expenditure and soaring food and fuel prices.