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Frederick Mitchell, Chief Economist | Aluma Capital (Pty) Ltd
Frederick Mitchell
March 20, 2025

View on Demand in the Economy

Retail Sales Performance

January 2025

Retail sales in South Africa significantly surpassed market expectations in January 2025, rising by 7.0% year-on-year, well above the anticipated contraction of 1.8%. This unexpected growth suggests a resurgence in consumer demand, particularly notable as it follows a low base in 2024.

The South African Chamber of Commerce and Industry (SACCI) Business Confidence Index also remained stable in January, further bolstering confidence in demand. Additionally, a decrease in consumer inflation coupled with an interest rate cut by the South African Reserve Bank in January 2025 appears to have positively impacted consumer spending.

Key contributors to the growth in retail sales included:

  • General Dealers: Increased by 8.4%, contributing 3.6 percentage points to overall growth.
  • Textiles and Clothing: Grew by 10.1%, adding another 1.6 percentage points.

This encouraging retail performance in January 2025 signals positive momentum for the economy as South Africa approaches the end of the first quarter. The interest rate cuts implemented from September 2024 to January 2025 seem to have relieved financial pressure on households, with demand showing signs of recovery. Maintaining this momentum throughout December 2024 and into 2025 will be essential, as consumer demand remains a vital driver of economic growth in South Africa.

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