Retailer con idence increases to 7‐year‐high

PRETORIA – Improved sales volumes seen by food and beverages and hardware retailers in the third quarter of 2021 has led the increase in retailer confidence to a seven-year-high, a Bureau for Economic Research (BER) survey showed on Monday.

Retailer confidence – although not broadbased – for the quarter increased marginally by 2 index points to 56, which is significantly above the survey’s long-term average of 39 points. Sentiment for non-durable (food and beverages) retailers increased from 51 to 58 points and hardware retailers rose from 65 in the second quarter, to 77 points in the third quarter.

“It’s a positive number, and I think it again reiterates that the underlying South African economy – although not in a great place – is a lot better than what people thought a couple of months ago,” Wayne McCurrie, portfolio manager at FNB Wealth & Investments, told Moneyweb.

Reinstatement of fiscal support

The BER noted that the reinstatement of the government Social Relief of Distress grant in August contributed to the increase in retailer

sentiment. The grant has the potential to increase the spending power of about eight million people who will be receiving the R350 every month.

The bureau says there is positive anticipation that the reinstated fiscal support will boost household income by about R40 billion in the next six months, benefitting food retailers and bringing much-needed relief to clothing and furniture retailers.

“The non-pensionable cash allowances paid to civil servants from September 2021 will likely benefit clothing and furniture retailers, while grocery retailers stand to benefit from the renewal of the SRD grant,” BER said in a statement.