South Africa’s retail sales slumped to their lowest in over a year in December after “Black Friday” discounts boosted the previous month, the statistics office said on Wednesday.
The statistics office said in Johannesburg that the hardest hit were general dealers, cosmetics and furniture as economic recovery continued to stumble.
Black Friday is a day of massive sales occasioned by discounts that originated in the U.S. but has become a mega shopping phenomenon in South Africa over the past two years.
The statistics office said retail sales fell 1.4 per cent year-on-year in December after a 2.9 per cent increase in November, while monthly sales contracted by 4.8 per cent, the biggest fall since May 2011.
South Africa’s economy emerged from a recession in the second half of 2018 after contracting in the first two quarters, but set to expand slowly in 2019 with national elections in May.
Five out of seven of the categories showed contractions as consumers cut back on small and big-ticket items, dimming the prospects of President Cyril Ramaphosa delivering on his pledge to lift growth.
“It’s a big surprise. We know November sales were pushed up by Black Friday but we expected growth of at least two per cent,” said economist at Nedbank Johannes Khosa.
“General dealers, which is the largest category and includes retailers like Game, Makro and Shoprite saw a substantial reversal.
“It seems consumers are opting to do all their shopping in November and cutting back over the festive holidays,” said Khosa.
Listed retailers have recently reported sluggish quarterly and half-year sales and earnings, as elevated household debt, higher fuel prices and an increase in value-added tax squeezed spending.