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Frederick Mitchell, Chief Economist | Aluma Capital (Pty) Ltd
Frederick Mitchell
January 23, 2025

View on Demand in the Economy

Retail Sales Performance

November 2024

In November 2024, South Africa’s retail sales rose by 7.7%, surpassing the 5.5% forecast, indicating a resurgence in consumer demand, particularly during Black Friday. The SACCI Business Confidence Index increased, and potential interest rate cuts could further boost spending. Overall, this positive trend supports economic growth as the country moves into 2025.

Retail sales in South Africa exceeded market expectations in November 2024, rising by 7.7% year-on-year and comfortably surpassing the predicted 5.5% increase. This stronger-than-expected growth signals a moderate resurgence in consumer demand, particularly during the “Black Friday” shopping period, suggesting an improvement in consumer finances and increased spending.

The SACCI Business Confidence Index also saw a boost, rising from 114.2 to 118.1 points in November, further supporting growth in demand. Additionally, lower consumer inflation and a potential interest rate reduction from the South African Reserve Bank in early 2025 could further enhance demand.

Key drivers of growth in retail sales included:

  • General Dealers: Up 11.9%, contributing 5.2 percentage points to overall growth.
  • Household Furniture, Appliances, and Equipment: Increased by 9.5%, adding 1.7 percentage points.
  • Textiles and Clothing: Grew by 9.5%, contributing another 1.7 percentage points.

However, the hardware, paint, and glass retail category contracted by 4.3%, reducing total growth by 0.4 percentage points.

The encouraging retail growth is a positive sign for the economy, particularly as fourth-quarter economic data is released. The interest rate reduction in September appears to have provided relief for households and is beginning to show benefits. Moreover, withdrawals from the two-pot system have positively impacted demand from October through Black Friday at the end of November 2024.

Sustaining this momentum through December 2024 and into 2025 will be crucial, as consumer demand remains a key driver of economic growth in South Africa.

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