A newly announced report by Mastercard reveals that during the 2017 summer festive season in South Africa, there was an improvement in consumer spending. According to the report, retail sales volumes in South Africa rose by 3,8% year-on-year after removing the effects of inflation.
This apparently marks the strongest monthly performance for South African retail spending since May 2013. Titled SpendingPulse, the South Africa report details holiday shopping in December 2017 and covers retail sales across all payment types, including cash and cheque.
“The spike in consumer spending during the holiday season took retail sales to new highs. Sturdier GDP growth, a lower inflation outlook, and the stronger Rand, which in turn drove down import prices – all benefited consumers over the holidays,” said Sarah Quinlan, Senior Vice President Market Insights at Mastercard.
Some interesting findings of the Mastercard SpendingPulse South Africa December 2017 include:
Pharmaceuticals, Medical Goods, Cosmetics and Toiletry sales climbed 6 percent year-on-year, after adjusting for inflation, showing the strongest growth the sector has seen in a year thanks to lower import prices.
Price inflation in clothing and footwear fell to its lowest since 2012, while food and beverage prices rose at the slowest rate since October 2015.
The General Dealer sector – which includes food and other day-to-day essentials – grew a mere 0.9 percent year-on-year when the effects of inflation are excluded. Though growth remained slow in this sector, this was the first December period since 2013 to see positive growth in general dealer sales volume.
Mastercard is able to extract such data given its financial payments technology. The SpendingPulse reports are released monthly to subscribers ahead of other sources with the hope of providing timely, accurate, and unbiased insight into the South African economy.
“The price index for General Dealer sales continued to rise at a quicker pace than total retail sales, largely due to faster growth in food prices in the wake of an enduring drought. Consumers hit by high Christmas food prices cut back on meat purchases and were less inclined to splurge on discretionary goods, instead of searching for deals and promotions,” concluded Quinlan.