Johannesburg, South Africa – 12 September 2018 – The clothing, pharmaceutical, medical goods, cosmetics and toiletry sectors outperformed the South African retail market for July 2018, showing year-on-year growth of 3.9 percent and 4.6 percent respectively, excluding the effects of inflation. This is according to the Mastercard SpendingPulse July 2018 report, which provides a macro-economic analysis of retail spending trends in South Africa.
Growth in South Africa’s total retail market decelerated for the fourth consecutive month, with total retail sales excluding the effects of inflation growing by two percent year-on-year compared to the 2.9 percent year-on-year recorded in June 2018. Total retail sales including the impact of inflation rose 4.8 percent year-on-year in July 2018 compared to 5.8 percent year-on-year in June 2018.
“The performance of the pharmaceutical and clothing sectors indicates that the South African consumer is still budgeting for some discretionary spending,” says Michael McNamara, Senior Principal, Data and Services at Mastercard.
“However, retail growth has slowed down driven mostly by the effects of increasing unemployment, higher inflation and low wage growth. We will be monitoring how a weaker rand and global trade disputes affect consumer spending in the months to come.”
In the clothing segment, July 2018 sales including the effects of inflation were up 5.9 percent year-on-year. Inflation contributed two percentage points to growth. The pharmaceutical, medical goods, cosmetic and toiletry category recorded 7.1 percent year-on-year growth for July 2018 when the impact of inflation is included.
The general dealer sector was a weak performer in July 2018, following a trend evident throughout the year. General dealer sales volumes, excluding the effects of inflation, declined 2.3 percent year-on-year for July 2018. Including the effects of inflation, general dealer sales rose 4.1 percent year-on-year, indicating strong inflationary effects in this sector.
Though inflation in food prices contributed to positive nominal sales growth for the food and beverages sector, which saw sales rise 3.3 percent year-on-year for July, there was a decline of 1.6 percent year-on-year, excluding the effects of inflation. This decline in July comes after 3.8 percent growth, excluding the effects of inflation, in June 2018.
“Sales in the food sector were affected by increased food inflation of 3.4 percent in July 2018 over the same month in the previous year. The impact of drought in Western Cape contributed to this pressure on consumer spending,” says McNamara. “The drought has also had an adverse impact on employment - 4.6 percent which comes from agriculture - and GDP growth.”
Mastercard SpendingPulse South Africa reports on national retail sales and uses aggregated and anonymous Mastercard transaction data, coupled with survey-based estimates for other payment forms including cash and cheque.
Reports are released monthly to subscribers ahead of other sources, providing timely, accurate, and unbiased insight into the South African economy. The report also includes an overall retail sales and price index to illustrate whether spending growth is being driven by increased shopping, inflation or increased promotions.
Ends
About Mastercard SpendingPulse
Mastercard SpendingPulse reports on national retail sales and is based on aggregate sales activity in the Mastercard payments network, coupled with survey-based estimates for certain other payment forms, such as cash and cheque. SpendingPulse reports and content, including estimated forecasts of spending trends do not in any way contain, reflect or relate to actual Mastercard operational or financial performance, or specific payment-card-issuer data. SpendingPulse is provided by Mastercard Advisors, the professional services arm of Mastercard.
About Mastercard Advisors
Mastercard Advisors, the professional services arm of Mastercard, provides clients around the world with insights and solutions that drive business impact and ROI. The company uses advanced analyses and deep expertise in the payment field to translate data into market behavior and customized services. With over 80 billion transactions processed annually in 210 countries worldwide, Mastercard Advisors uses aggregated information and a consultative approach to help financial institutions, merchants, media companies, government and organizations of different sizes to boost their businesses. For more information, access www.Mastercardadvisors.com.
About Mastercard
Mastercard, www.mastercard.com, is a technology company in the global payments industry. We operate the world’s fastest payments processing network, connecting consumers, financial institutions, merchants, governments and businesses in more than 210 countries and territories. Mastercard products and solutions make everyday commerce activities – such as shopping, traveling, running a business and managing finances – easier, more secure and more efficient for everyone. Follow us on Twitter: @MastercardMEA and @MastercardNews, join the discussion on the Beyond the Transaction Blog and subscribe for the latest news on the MEA Engagement Bureau.
Growth in South Africa’s total retail market decelerated for the fourth consecutive month, with total retail sales excluding the effects of inflation growing by two percent year-on-year compared to the 2.9 percent year-on-year recorded in June 2018. Total retail sales including the impact of inflation rose 4.8 percent year-on-year in July 2018 compared to 5.8 percent year-on-year in June 2018.
“The performance of the pharmaceutical and clothing sectors indicates that the South African consumer is still budgeting for some discretionary spending,” says Michael McNamara, Senior Principal, Data and Services at Mastercard.
“However, retail growth has slowed down driven mostly by the effects of increasing unemployment, higher inflation and low wage growth. We will be monitoring how a weaker rand and global trade disputes affect consumer spending in the months to come.”
In the clothing segment, July 2018 sales including the effects of inflation were up 5.9 percent year-on-year. Inflation contributed two percentage points to growth. The pharmaceutical, medical goods, cosmetic and toiletry category recorded 7.1 percent year-on-year growth for July 2018 when the impact of inflation is included.
The general dealer sector was a weak performer in July 2018, following a trend evident throughout the year. General dealer sales volumes, excluding the effects of inflation, declined 2.3 percent year-on-year for July 2018. Including the effects of inflation, general dealer sales rose 4.1 percent year-on-year, indicating strong inflationary effects in this sector.
Though inflation in food prices contributed to positive nominal sales growth for the food and beverages sector, which saw sales rise 3.3 percent year-on-year for July, there was a decline of 1.6 percent year-on-year, excluding the effects of inflation. This decline in July comes after 3.8 percent growth, excluding the effects of inflation, in June 2018.
“Sales in the food sector were affected by increased food inflation of 3.4 percent in July 2018 over the same month in the previous year. The impact of drought in Western Cape contributed to this pressure on consumer spending,” says McNamara. “The drought has also had an adverse impact on employment - 4.6 percent which comes from agriculture - and GDP growth.”
Mastercard SpendingPulse South Africa reports on national retail sales and uses aggregated and anonymous Mastercard transaction data, coupled with survey-based estimates for other payment forms including cash and cheque.
Reports are released monthly to subscribers ahead of other sources, providing timely, accurate, and unbiased insight into the South African economy. The report also includes an overall retail sales and price index to illustrate whether spending growth is being driven by increased shopping, inflation or increased promotions.
Ends
About Mastercard SpendingPulse
Mastercard SpendingPulse reports on national retail sales and is based on aggregate sales activity in the Mastercard payments network, coupled with survey-based estimates for certain other payment forms, such as cash and cheque. SpendingPulse reports and content, including estimated forecasts of spending trends do not in any way contain, reflect or relate to actual Mastercard operational or financial performance, or specific payment-card-issuer data. SpendingPulse is provided by Mastercard Advisors, the professional services arm of Mastercard.
About Mastercard Advisors
Mastercard Advisors, the professional services arm of Mastercard, provides clients around the world with insights and solutions that drive business impact and ROI. The company uses advanced analyses and deep expertise in the payment field to translate data into market behavior and customized services. With over 80 billion transactions processed annually in 210 countries worldwide, Mastercard Advisors uses aggregated information and a consultative approach to help financial institutions, merchants, media companies, government and organizations of different sizes to boost their businesses. For more information, access www.Mastercardadvisors.com.
About Mastercard
Mastercard, www.mastercard.com, is a technology company in the global payments industry. We operate the world’s fastest payments processing network, connecting consumers, financial institutions, merchants, governments and businesses in more than 210 countries and territories. Mastercard products and solutions make everyday commerce activities – such as shopping, traveling, running a business and managing finances – easier, more secure and more efficient for everyone. Follow us on Twitter: @MastercardMEA and @MastercardNews, join the discussion on the Beyond the Transaction Blog and subscribe for the latest news on the MEA Engagement Bureau.
