Durable goods lead persistent sales slide
June 18, 2009
By Florence de Vries
Sales of durable and semi-durable goods kept falling at an alarming pace in April, according to data released by Statistics SA yesterday, as financial strain on consumers intensified.
Compared with April last year, sales of hardware, paint and glass plummeted 25.8 percent, household furniture and textiles slid 13.8 percent and clothing, footwear and leather goods dropped 7.3 percent.
Retail analysts expressed surprise yesterday at the 6.7 percent year-on-year fall in overall retail trade sales for April, compared with a revised fall of 4.9 percent for March. But they expected a resurgence in sales for last month.
Despite Easter falling in April this year, Stats SA figures show retail sales at constant prices for the three months to April reflected a decrease of 5.4 percent compared with the same period last year, fuelling the consensus that the economy is continuing to slow down significantly.
Diane Laas, a retail analyst at Investec, said the low number could be attributed to a host of factors influencing the economy, but the fall in sales mostly indicated the effect that job losses were starting to have.
"Despite lower interest rates many consumers are rebuilding their balance sheets for the next year and will continue to focus on ridding themselves of debt," she said.
Easter holidays and the elections had relatively little impact on sales in April, analysts say, since lost trading days would only have exacerbated the already dismal numbers. Falling income due to rising job losses, reduced pay and falling asset prices is likely to keep consumers out of shops.
Kevin Lings, an economist at Stanlib, said the latest fall would have a negative impact on the estimate of second-quarter gross domestic product.
Evan Walker, a portfolio manager at RMB Asset Management, said sales in April were significantly lower than expected but indications from most major retailers showed April was the month in which retail sales had bottomed out.
"There may be a revival in trade sales post-election and the first indication of winter in May should boost sales again."
He reiterated Laas' point that there was no identifiable factor that would pinpoint the reason for the continued fall in sales.
Investec analyst Annabel Bishop said South Africa's recession was partly driven by the loss in demand for its exports and partly by previous vigorous interest rate tightening.
|
|
