Clothing and footwear sales have once again increased while most other major retail categories experienced declines.
This includes general dealers that sell a variety of goods, including groceries.
Statistics SA’s retail trade data for June shows that pressure remains widespread across most of the major retailer categories, with the exception of clothing and footwear retail which recorded a 5.8 percent real, year-on-year growth.
Even this growth, however, is slowing, which says a lot for consumers’ disposable income levels.
Overall retail trade sales saw the seventh consecutive real, inflation-adjusted, year-on-year decline, to the tune of 0.9 percent, says John Loos, senior economist at FNB commercial property. This follows a revised 1.6 percent declined in May 2023, which he hopes point to a levelling out in real retail sales.
But even the less cyclical “general dealers” saw a decline of 2.7 percent, as a slowing economy and significantly higher food and grocery prices exert pressure on real consumer disposable income.
“There is also pressure in home-related retail – household furniture, appliances and equipment, which declined by 1 percent, and hardware, paint and glass retail sales by an even larger 4.4 percent year-on-year.
“Declines in these two latter categories make sense, given that many home-related purchases and maintenance items are postpone-able in tough financial times, he says.
Pharmaceutical and health care retailers saw a 1.4 percent year-on-year real decline, and the large ‘other retailers’ category saw a 1.6 percent decline, so the drop was broad-based across the major retail categories.
Loos says this most recent data sustains the pressure on retail shopping centre tenants, and thus on the centres themselves, likely having caused further slowdown in growth in retail centre trading densities during the second quarter of 2023.
All five main shopping centre categories – super regional, regional, small regional, community, and neighbourhood – showed slowing trading density growth as at the first quarter of 2023, following on the post-lockdown recovery through 2021/22.
“Declining real retail sales comes at a time when shopping centre owners and tenants face significant operating cost pressures too, including often above-inflation municipal tax and utilities tariff hikes. This, while also needing to find costly electricity alternatives due to unreliable power supply.”
In short, he says, the declining June 2023 real retail sales numbers point to a likely continuation of the recent weakening in the retail property market on a national basis.
IOL Business