South Africa’s retailer confidence increased marginally to reach a 7-year high of 56 in the third quarter of 2021, up from 54 in the second quarter, said the Bureau of Economic Research (BER) at the University of Stellenbosch on Monday.
The BER said this is a positive development especially in the aftermath of violent protests and stricter trade restrictions amid a third wave of COVID-19 infections.
“At this level, sentiment is essentially above its long-term average of 39. Confidence was largely driven by non-durable goods (food and beverages) and hardware retailers on the back of improved sales volumes in these categories. Despite this improvement in sentiment, retailers faced a tough operating environment overall,” said BER economist Tshepo Moloi.
He stated that retailers in KwaZulu-Natal and Gauteng provinces had sales losses because of COVID-19 restrictions and riots which made consumers immobile and some reluctant to visit malls and shopping centres.
Looking ahead into the fourth quarter, the overall retail sector remains pessimistic about business conditions and sales volumes. The effects of the civil unrest, which could linger for about 18 months, a weak labor market, the ongoing COVID-19 pandemic and global supply chain disruptions remain causes of uncertainty for the sector, according to the economist.
Moloi said that on a more positive note, the recently announced fiscal support should boost household income by an estimated 40 billion rand (about 2.7 billion U.S. dollars) over the next 6 months. Enditem