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Frederick Mitchell, Chief Economist | Aluma Capital (Pty) Ltd
Frederick Mitchell
November 20, 2024

A View on Demand in the Economy: Retail Sales Performance

Retail sales in South Africa rose 0.9% in September 2024, surpassing expectations of a 0.7% decline, signalling a modest recovery in consumer demand. Growth was led by general dealers, while textiles and clothing stores saw a 5.5% contraction. Despite tight budgets, anticipated interest rate cuts could further boost consumer confidence and demand.

Retail sales in South Africa once again exceeded market expectations in September 2024, growing by 0.9% annually and comfortably surpassing the predicted contraction of 0.7%. This growth indicates a modest resurgence in consumer demand, suggesting that consumer behaviour may be improving, especially as Business Confidence increased from 38 to 45 index points. Additionally, lower consumer inflation and an anticipated interest rate reduction by the South African Reserve Bank could further enhance consumer demand.

The growth in retail sales was largely driven by general dealers, who reported a 4.5% increase, contributing 2.1 percentage points to total growth. However, the largest negative impact came from retailers of textiles, clothing, footwear, and leather goods, which contracted by 5.5%, causing a reduction of 0.9 percentage points in overall growth.

Despite this positive trend, households remain cautious due to tight budgets and relatively high interest rates, even after the 25-basis point cut in September and another reduction expected in November. The effects of the September rate cut will only be visible in the October data, set to be released in December 2024. If the anticipated rate reduction in November occurs, it may boost consumer confidence and stimulate slightly higher consumer demand, ultimately contributing to the economic growth that South Africa desperately needs.

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Why Hiking Interest Rates on Imported Inflation Will Stifle South Africa’s Fragile Economy

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Inflation Relief, Real-Economy Headwinds, and the Geopolitical Imperative for South Africa

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Consumer Inflation – July 2026

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