July’s looting rips into retail trade sales
July retail trade sales plunged 11.2% from the preceding month, the biggest monthly decline since April 2020 when the sector cratered under the weight of hard lockdown restrictions.
That gives a pretty clear sense of the economic damage that was wrought by the wave of carnage that month, and is the latest indicator pointing to a third-quarter economic contraction.
On an annual basis, retail trade sales fell 0.8% in July, Statistics South Africa (Stats SA) said on 15 September.
At first glance, the year-on-year number may not look that bad until one considers the sector’s ailing state of affairs in July 2020. Or the fact that in June year-on-year growth was 10.5%, 15.5% in May, and 95.1% in April.
“Few would have expected a contraction in year-on-year terms, given that the base in 2020 was still impacted by some lockdown restrictions and a severe wave of Covid in the winter months,” Razia Khan, chief Africa economist at Standard Chartered Bank in London, told DM168.
Standard Chartered expected a slowdown in growth to 3.5%, so the number fell below expectations, highlighting the impact of the July unrest in KwaZulu-Natal and Gauteng.
Sales of household furniture, appliances and equipment comprised the biggest decliner among subsectors, falling 10.2% yearon-year.
In the three months to the end of July, Stats SA said retail trade sales decreased 2.9%, on a seasonally adjusted basis, compared with the preceding three months.
This was the first decline on this front since June last year, probably the most wretched three-month period that the retail sector has ever faced.
Among other things, the data seal the case for the Reserve Bank to hold interest rates steady when its Monetary Policy Committee meets on 23 September.