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Frederick Mitchell, Chief Economist | Aluma Capital (Pty) Ltd
Frederick Mitchell
April 16, 2025

View on Demand in the Economy

Retail Sales Performance

February 2025

Retail sales in South Africa rose by 3.9% in February, falling short of the market expectation of 6.5%. This modest growth indicates a slower-than-anticipated recovery in consumer demand since late 2024, particularly following a low economic base at the start of the year.

The South African Chamber of Commerce and Industry (SACCI) reported a significant increase in the Business Confidence Index, rising from 120 points in January to 125.8 in February, reflecting growing optimism about the South African economy. Additionally, low consumer inflation and an interest rate cut by the South African Reserve Bank in January 2025 have positively influenced consumer spending.

Key contributors to the growth in retail sales included:

  • General Dealers: Up by 3.4%, contributing 1.6 percentage points to overall growth.
  • Textiles and Clothing: Increased by 15.7%, adding another 2.3 percentage points.

This rise in retail sales during February 2025 signals positive momentum for the economy as South Africa nears the end of the first quarter. The interest rate cuts from September 2024 to January 2025 appear to have eased financial pressures on households, with demand showing signs of recovery. Sustaining this momentum through December 2024 and further into 2025 will be crucial, as consumer demand remains a key driver of economic growth and job creation in South Africa.

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