1 RETAIL TRADE SALES FORECAST FOR SOUTH AFRICA, 2014 Research Report No 443
2 ACADEMIC MANAGEMENT BOARD Prof RM Phakeng Mr AT Robinson Prof VA Clapper Ms A Singh Prof DH Tustin Prof AA Ligthelm Mr G Bijker RESEARCH AND PUBLICATIONS COMMITTEE Prof DH Tustin (Chairperson) Prof AA Ligthelm Prof JPR Joubert Prof CJ van Aardt Prof EO Udjo Prof JW Strydom COORDINATING PROJECTS COMMITTEE Mr G Bijker (Chairperson) Prof DH Tustin (BMR) Ms A Singh (Vice-Chairperson) Prof AA Ligthelm (BMR) Mr L Buys Ms C Viljoen Ms T Stafford Ms N Sekoto Mr B Rousseau DIVISIONAL PROJECTS COMMITTEES CHAIRPERSONS AND VICE-CHAIRPERSONS HOUSEHOLD WEALTH RESEARCH BEHAVIOURAL AND COMMUNICATION ECONOMIC RESEARCH DEMOGRAPHIC RESEARCH Ms A Singh (Chairperson) Mr L Buys (Vice-Chairperson Ms T Stafford (Chairperson) Ms C Viljoen (Vice-Chairperson) Mr B Rousseau (Chairperson) Ms N Sekoto (Vice-Chairperson) Mr G Bijker (Chairperson) Ms N Sekoto (Vice-Chairperson) YOUR CONTACTS AT THE BMR RESEARCH Prof DH Tustin (Head) (012) Prof AA Ligthelm (012) Prof CJ van Aardt (012) Prof EO Udjo (012) Prof JPR Joubert (012) SERVICES COMMISSIONED RESEARCH ACCOUNTS Prof DH Tustin (012) Ms Sheleph Burger (012) Prof AA Ligthelm (012) Prof EO Udjo (012) Prof CJ van Aardt (012) Prof JPR Joubert (012) SALE OF REPORTS LIBRARY Ms P de Jongh/Ms M Goetz (012) /3329 Ms Cherryl Kemp (012) MEMBERSHIP LIAISON Ms P de Jongh/Ms M Goetz (012) /3329 Ms P de Jongh (012) GENERAL TELEPHONE NUMBERS GENERAL FAX NUMBER (012) (012) ADDRESS: WEB SITE ADDRESS: POSTAL ADDRESS STREET ADDRESS BUREAU OF MARKET RESEARCH BUREAU OF MARKET RESEARCH P O BOX 392 THEO VAN WIJK BUILDING UNISA (Gold Fields Entrance) 0003 Unisa Muckleneuk Campus Pretoria 0002
3 RETAIL TRADE SALES FORECAST FOR SOUTH AFRICA, 2014 by Prof DH Tustin (DCom) Prof CJ van Aardt (DBA) Dr JC Jordaan (PhD) Mr JA van Tonder (MCom) Ms J Meiring (BCom Hons) BUREAU OF MARKET RESEARCH COLLEGE OF ECONOMIC AND MANAGEMENT SCIENCES UNISA Research Report 443 Pretoria 2014
4 2014 Bureau of Market Research Published by the Bureau of Market Research, (BMR) University of South Africa, P O Box 392, UNISA, 0003 All rights reserved. No part of this publication may be reproduced, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission in writing of the Head of the Bureau of Market Research. RESEARCH REVIEWERS This report was reviewed by a research panel consisting of a BMR panel of reviewers Exclusion of claims. Despite all efforts to ensure accuracy in the assembly of information and data or the compilation thereof, the BMR is unable to warrant the accuracy of the information, data and compilations as contained in its reports or any other publication for which it is responsible. Readers of all the publications referred to above are deemed to have waived and renounced all rights to any claim against Unisa and the BMR, its officers, project committee members, servants or agents for any loss or damage of any nature whatsoever arising from any use or reliance upon such information, data or compilations.
5 i C O N T E N T S Page LIST OF TABLES... iii LIST OF FIGURES... v LIST OF EXHIBITS... vi PREFACE... vii CHAPTER 1: INTRODUCTION AND RESEARCH METHODOLOGY 1.1 INTRODUCTION RATIONALE FOR METHODOLOGY MACROECONOMIC FORECAST INTERNATIONAL AND DOMESTIC RISKS THAT CAN INFLUENCE THE FORECAST CONCLUSION CHAPTER 2: RETAIL TRADE SALES ANALYSES 2.1 INTRODUCTION RETAIL SALES PATTERNS BY OUTLET SEASONAL PATTERNS BY TYPE OF RETAIL OUTLET RETAIL SALES GROWTH TRENDS RETAIL TRADE SALES GROWTH AND CONTRIBUTIONS BY TYPE OF OUTLET CONCLUSION CHAPTER 3: RETAIL TRADE SALES FORECAST FOR INTRODUCTION RETAIL SALES FORECAST BY RETAIL OUTLET... 27
6 ii 3.3 FINAL CONSUMPTION EXPENDITURE FORECAST BY PRODUCT GROUP RETAIL TRADE SALES FORECAST BY PRODUCT GROUP CONCLUSION CHAPTER 4: OVERVIEW AND CONCLUDING REMARKS 4.1 OVERVIEW CONCLUDING REMARKS BIBLIOGRAPHY... 48
7 iii LIST OF TABLES Table Page 1.1 COEFFICIENT SIZES OF THE SUBCOMPONENTS OF HOUSEHOLD CONSUMPTION EXPENDITURE TO HOUSEHOLD CONSUMPTION EXPENDITURE KEY ECONOMIC AND HOUSEHOLD CONSTRUCT INDICATORS, MARKET SHARES OF RETAIL OUTLETS, (CURRENT PRICES) ANNUAL REAL % GROWTH RATES BY TYPE OF RETAILER, (CONSTANT 2012 PRICES) PERCENTAGE CONTRIBUTION BY TYPE OF RETAILER TO THE ANNUAL REAL GROWTH IN TOTAL RETAIL TRADE SALES: (CONSTANT 2012 PRICES RETAIL TRADE SALES FORECAST GROWTH RATES FOR 2013 AND 2014 (CURRENT PRICES) RETAIL TRADE SALES FORECAST GROWTH RATES FOR 2013 AND 2014 (CONSTANT 2012 PRICES) RETAIL TRADE SALES FORECAST FOR 2013 AND 2014 (CURRENT PRICES) RETAIL TRADE SALES FORECAST FOR 2013 AND 2014 (CONSTANT 2012 PRICES) FINAL CONSUMPTION EXPENDITURE FORECAST FOR 2013 AND 2014 (CURRENT PRICES) ANNUAL GROWTH RATES IN FINAL CONSUMPTION EXPENDITURE (%), (CURRENT PRICES) FINAL CONSUMPTION EXPENDITURE DEFLATOR FORECAST (%), FINAL CONSUMPTION EXPENDITURE FORECAST, (CONSTANT 2012 PRICES) FINAL CONSUMPTION EXPENDITURE FORECAST, (CONSTANT 2012 PRICES) FORECAST OF FINAL CONSUMPTION EXPENDITURE INCURRED BY CATEGORY AND PRODUCT/SERVICE GROUP (CURRENT PRICES), FORECAST OF FINAL CONSUMPTION EXPENDITURE INCURRED AT RETAIL OUTLETS (CONSTANT 2012 PRICES)... 41
8 iv 3.12 FORECAST OF FINAL CONSUMPTION EXPENDITURE BY PRODUCT GROUP THROUGH THE RETAIL CHANNEL, (CURRENT PRICES) FORECAST OF FINAL CONSUMPTION EXPENDITURE BY PRODUCT GROUP THROUGH THE RETAIL CHANNEL, (CONSTANT 2012 PRICES)... 43
9 v LIST OF FIGURES Figure Page 2.1 MARKET SHARES OF THE TWO LARGEST TYPES OF RETAILERS: GENERAL DEALERS AND CLOTHING AND FOOTWEAR RETAILERS: JANUARY 2005 TO SEPTEMBER 2013 (CURRENT PRICES) MARKET SHARES OF THE OTHER TYPES OF RETAILERS: JANUARY 2005 TO SEPTEMBER 2013 (CURRENT PRICES) HIGH- AND LOW-SELLING MONTHS OF GENERAL DEALERS (CONSTANT PRICES: BASE YEAR 2012) HIGH- AND LOW-SELLING MONTHS OF RETAILERS IN FURNITURE, APPLIANCES AND EQUIPMENT (CONSTANT PRICES: BASE YEAR 2012) HIGH- AND LOW-SELLING MONTHS OF RETAILERS IN FOOD, BEVERAGES AND TOBACCO (CONSTANT PRICES: BASE YEAR 2012) HIGH- AND LOW-SELLING MONTHS OF RETAILERS IN PHARMACEUTICALS, COSMETICS AND TOILETRIES (CONSTANT PRICES: BASE YEAR 2012) HIGH- AND LOW-SELLING MONTHS OF RETAILERS IN HARDWARE, PAINT AND GLASS (CONSTANT PRICES: BASE YEAR 2012) HIGH- AND LOW-SELLING MONTHS OF RETAILERS IN CLOTHING, FOOTWEAR AND LEATHER GOODS (CONSTANT PRIDCES: BASE YEAR 2012) REAL ANNUAL PERCENTAGE GROWTH IN RETAIL SALES: 2003 SEPTEMBER 2013 (CONSTANT 2012 PRICES)... 23
10 vi LIST OF EXHIBITS Exhibit Page 2.1 HIGH- AND LOW-SELLING MONTHS PER TYPE OF RETAIL OUTLET... 22
11 vii PREFACE The Economic Research Division of the Bureau of Market Research (BMR) has conducted a forecast for formal retail sales in South Africa on an annual basis for more than 25 years. Building on the past tradition and working in collaboration with members of the BMR s Household Wealth Research Division, the 2014 research calendar once again includes a forecast for formal retail sales. However, in response to syndicate sponsor members demands, the 2014 forecast differs from the conventional method applied before 2013 by the inclusion of an econometric forecasting model. As in 2013, the 2014 report includes innovative analyses featuring seasonal trend analysis and breakdowns of retail trade sales patterns according to outlet type. These additions are largely complementary to the traditional BMR forecast that mainly featured a forecast by product group and retail prices. By taking into account the prospects of both the 2014 local and national economies, the BMR estimates formal retail sales to grow by 2.8% in At an estimated 4.7% average price increase in retail items for 2014, total formal retail sales at current prices are expected to amount to R million. Retail outlets that are expected to show the highest growth rates (in nominal terms) are clothing, footwear and leather retailers (10.2% nominal growth), followed by retailer hardware outlets (9.7% nominal growth). Turning to the forecast of retail expenditure by product group in constant terms, the BMR expects the highest retail demand increases for computer and related equipment and recreational and entertainment goods (above 6.0%). Overall, semidurable goods are anticipated to increase by 5.1% while durable and nondurables are most likely to grow by 4.4% and 1.8% respectively. When compared to 2013, only nondurable retail goods are anticipated to grow at a higher rate in 2014 (2013 = 0.9%). The report was compiled by Prof DH Tustin, Prof CJ van Aardt, Dr JC Jordaan, Mr JA van Tonder and Ms J Meiring. The typing and technical layout of the report was done by Mrs E Koekemoer (BMR Senior Research Coordinator) while Mrs C Kemp (BMR Language Editor) was responsible for the language editing. Prof DH Tustin Executive Research Director Bureau of Market Research
12 1 CHAPTER 1 INTRODUCTION AND RESEARCH METHODOLOGY 1.1 INTRODUCTION Available data indicates that household income growth is under pressure giving rise to a situation where household expenditure growth is being severely constrained. The relatively low GDP growth rate expected for South Africa during 2014 together with low propensities to employ among businesses will also give rise to sluggish employment growth during 2014, which will put household finances under further pressure. The 50 basis point hike in the repurchase rate by the South African Reserve Bank (SARB) during January 2014 will impact household demand negatively in various ways, contributing to lower growth in household consumption expenditure during Given the anticipated lower growth in household incomes and expenditures the key question remains how these developments are most likely to impact on the formal retail trade sector of South Africa in This report aims to provide some clarity in this regard. During 2013 the Bureau of Market Research (BMR) revamped the way in which annual formal retail trade sales for South Africa are forecasted by employing a macroeconometric forecasting model to arrive at estimates of greatest likelihood. This methodology differs from the previous forecasting model used prior to 2013, which was a mixed method of expert-based forecasting combined with exponential smoothing (as key qualitative forecasting technique) and a backcast retail trade sales time-series model. Although this mixed method of forecasting has not been discarded entirely from the said 2013 retail forecast onwards, its application has been reinforced by the new macroeconometric forecasting model. To align with past practices this report commences with an overview of the international and local macroeconomic environment that serves as a platform for producing retail trade sales estimates of greatest likelihood for 2014.
13 2 1.2 RATIONALE FOR METHODOLOGY South Africa s economic performance correlates closely with international economic events, largely supporting the rationale to first investigate the relationship and/or interdependence between local economic performance and international growth. Generally, strong international economic growth rates result in good performance by the South African economy. Econometric analysis shows a 0.89 correlation between real global gross domestic product (GDP) and real South African GDP during the 2000 to 2012 period and a correlation of 0.96 between the Unites States and South African GDP. The strong relationship between international economic events and the South African economy (especially after 2000) can largely be attributed to the openness of the South African economy. More specifically, the extent of openness of the South African economy is determined by the extent of international trade. In this regard, SARB estimates that South Africa s imports and exports comprise almost 60% of South Africa s GDP (58.5% in 2013Q3) (SARB 2013). It therefore follows that an international economic upswing should ultimately stimulate South African exports and imports, while a downswing will lead to a slowdown in South African exports and imports. Due to the strong relationship between global and South African economic growth and consequently the impact of international economic conditions on South Africa s economic performance, it is critically important to gauge international economic growth before estimating the South African economic growth and retail trade sales in particular. Against this background, the International Monetary Fund (IMF), as a credible independent international institution, measures and forecasts world economic growth. The IMF estimates that the world economy is expected to expand by 3.7% during 2014 in real terms (excluding inflation), set to accelerate to 3.9% in 2015 (IMF 2014).
14 3 A downside risk to this global outlook is said to persist due to unexpected tighter financial conditions, geopolitical risks and prolonged sluggish economic growth. However, the IMF acknowledges the improved confidence in the sustainability of a US economic recovery and the long-term viability of the euro area. In this light, paired with improved final demand in advanced economies and a rebound in exports in emerging economies, the IMF has produced the relatively optimistic growth forecast shown above in its World Economic Outlook Update in January 2014 (IMF 2014). It mentions that the probability of global growth falling below 2.0% during 2014 has decreased significantly (probability of below 10%) compared to previous expectations. Given the introductory analysis, it is clear that South African economic growth and therefore retail trade sales can follow two pathways, depending on the outcome of international economic growth. Should world economic growth pan out positively as foreseen by the more optimistic IMF scenario, South African economic growth and retail trade sales will perform better than expected. However, if international policy makers act less favourably, South African economic growth and retail trade sales performance are expected to be weaker. Furthermore, domestic events such as prolonged labour strikes, the rate at which SARB s repurchase rate is hiked during 2014, levels of political and social stability given that 2014 is election year, investor sentiment regarding South Africa (as reflected by local business confidence indices as well as international rating agencies) and constrained capacity in the form of infrastructure and supportive economic policy could also impact South African economic growth and, in turn, retail sales. As a result of this uncertainty, the 2014 South African retail trade sales growth at the macrolevel was forecasted following three different scenarios. The first scenario assumes a 3.8% world economic growth rate (optimistic scenario), the second scenario assumes a world economic growth rate of 3.7% (baseline scenario) and the third scenario assumes a world growth rate of 3.4% (pessimistic scenario). It needs to be noted that for purposes of the macroeconometric modelling exercise giving rise to
15 4 household consumption expenditure and retail sales estimates, the said 3.7% world growth assumption (see table 1.3) was used as basis for forecasting the 2014 formal retail trade sales. 1.3 MACROECONOMIC FORECAST The macroeconomic forecast was done using a macroeconometric model that was developed by the Bureau of Market Research (BMR), based on a Keynesian demand-side structure. To produce forecasts for retail sales, a separate set of econometric equations were estimated where retail sales constitute a function of household consumption expenditure and interest rates (if statistically significant). The final results for the subcomponents of retail sales are restricted by the growth forecasted in the model for household consumption expenditure. A more confined inspection of interdependencies is shown in table 1.1, which displays the coefficient sizes (in natural logs) of the long-run equations of the subcomponents of household consumption expenditure with respect to total household consumption expenditure and interest rates (where statistically significant) in real terms. The durable recreational and entertainment goods sector shows the largest coefficient of This can be interpreted as that for every one per cent increase in household consumption expenditure, sales of recreational and entertainment goods increase by 2.58 per cent (and vice versa). Higher coefficients are expected for durable goods and this can be interpreted that such goods can outperform other sectors in economic upswing periods, but suffer the most in economic downturns. The motorcar tyres, parts and accessories sector has the lowest coefficient of 0.36 while the food, beverages and tobacco sector also has a low coefficient of As a result, for every one per cent increase in household consumption expenditure, sales in the food, beverages and tobacco sector increase by only 0.43 per cent on average.
16 5 Prime interest rates are not significant for any of the nondurable goods sectors. This emphasises the nature of these goods (that they are short-term in nature and as such are not financed through long-term loans). The clothing and footwear (semidurable) sector shows the highest coefficient with respect to the prime interest rate (for every one per cent increase in the prime rate, sales of clothing and footwear decrease, on average, by 0.51 per cent). This is an interesting result as one would expect durable goods to have higher coefficients with respect to prime rates. The R 2 is an indication of the goodness of fit (the manner to which the movement in total household consumption expenditure and interest rates, where applicable, explain the variation in the particular expenditure subcomponent); a value closer to 1 indicates a better fit.
17 6 TABLE 1.1 COEFFICIENT SIZES OF THE SUBCOMPONENTS OF HOUSEHOLD CONSUMPTION EXPENDITURE TO HOUSEHOLD CONSUMPTION EXPENDITURE Components Subcomponents Household consumption Prime R 2 expenditure Durable goods Furniture, household appliances, etc Personal transport equipment Computers and related equipment Recreational and entertainment goods 2.58 Ns 0.98 Other durable goods 1.16 ns 0.93 Semidurable goods Clothing and footwear Household textiles, furnishings, glassware, etc Motorcar tyres, parts and accessories Recreational and entertainment goods 1.65 ns 0.95 Miscellaneous goods Nondurable goods Food, beverages and tobacco 0.43 ns 0.94 Household fuel and power 0.79 ns 0.91 Household consumer goods 1.41 ns 0.98 Medical and pharmaceutical products 0.64 ns 0.86 Petroleum products 1.09 ns 0.95 Recreational and entertainment goods 0.77 ns 0.93 Services Rent 0.61 ns 0.97 Household services, including domestic servants 0.70 ns 0.99 Medical services 1.83 ns 0.97 Transport and communication services 1.67 ns 0.97 Recreational, entertainment and educational services Miscellaneous services 1.53 ns 0.95 * ns Not significant; all the variables that are included in the table are statistically significant at a 5% level. Source: BMR macroeconometric model Key economic and household indicators used as a base to predict 2014 retail sales are shown in table 1.2. The retail forecasts are modelled as a baseline scenario, but the optimistic and pessimistic scenarios provide an indication of expectations in the light of the uncertainty in the world economy in particular. As indicated above, only the baseline core data shown in table 1.2 were used for modelling purposes to derive 2014 household consumption expenditure and retail sales estimates of greatest likelihood (contained in chapter 3).
18 7 The BMR baseline scenario shows that during 2014 the South African GDP is expected to expand in real terms (adjusted for inflation) at 2.8%, while CPI inflation is expected to average at 5.7%. The South African prime rate during early January 2014 is expected to remain constant during the year at 8.5%, provided that no price shocks should hit South Africa. The emerging market contagion following the Turkish lira crisis and indications of tapering by the US Federal Reserve with respect to their bond buying programme during late January 2014, however, provided sufficient pressure on SARB to increase the repo rate. Continuing sluggish domestic economic and employment growth could cause SARB to keep the repo rate unchanged for the remainder of It is also expected that the US Federal Reserve will keep their rates constant during 2014 and that an upward cycle in international interest rates in large developed economies may only start featuring late in 2014 or early Household consumption expenditure is expected to grow at 2.8% in real terms and 8.4% in nominal terms, while household credit extension is expected to increase by 7.6% during However, there are a number of uncertainties and risks that will influence the forecasts (see section 1.4). If required, an update of the formal retail trade forecast will be made available by mid-year to reflect any new information affecting the current forecast. TABLE 1.2 KEY ECONOMIC AND HOUSEHOLD CONSTRUCT INDICATORS, 2014 Key constructs Optimistic scenario Baseline scenario Pessimistic scenario % % % World GDP (real) US GDP (real) South Africa: GDP growth (real) Consumer Price Index (CPI) Production Price Index (PPI) Household consumption expenditure growth (real) Household consumption expenditure growth (nominal) Household credit extension Source: BMR macroeconometric model
19 INTERNATIONAL AND DOMESTIC RISKS THAT CAN INFLUENCE THE FORECAST There are a number of international and domestic risks that may influence the outcome of the 2014 BMR forecasts. international and local risks: These include, but are not limited to the following International risks: - Quicker than expected tapering of quantitative easing by the United States Federal Reserve. This can result in further outflows of foreign portfolio investment that could lead to a further depreciation in the rand and weakening government bonds. - Tapering by the US taking place too rapidly, causing the US economy to slow down or move into a recession, dragging the world economy back into a recession. Such tapering will also give rise to an emerging country contagion that could severely impact South Africa, given that it is a low-growth emerging country. - Slower economic growth in China (and emerging markets). This can result in lower global growth, lower business confidence and lower commodity prices that could hurt domestic exports and lead to a further depreciation of the rand. It can also impact levels of investment negatively, and here especially by mining companies. An emerging market crisis, for example instability in Turkey, may also result in an outflow of domestic portfolio investment from South Africa. South African markets are, in some cases, used as a proxy for sentiment in emerging markets, given the well-developed financial markets and easy tradable currency. - Additional problems in the euro area. This can range from continued slow growth to further threats of one or two countries leaving the euro zone (especially in the Southern EU countries). This could have a further negative impact on the demand for South African exports to the EU. - Turmoil in the Middle East that may result in escalating crude oil prices (impacting domestic fuel prices).
20 9 South African risks: - Increased strike action, resulting in a further loss of confidence in the South African economy. This could result in a further depreciation of the rand, lower levels of investment, lower levels of imports, lower consumption expenditure and a lower GDP growth rate. - Electricity shortfall and load shedding. This could result in a loss of confidence, a loss in production and slower economic growth. - A relatively large (and potentially increasing) budget deficit. The latest budget deficit figure of 4.3% of GDP could increase if government expenditure increases in excess of the increase in tax income. This could result in further disinvestment of especially portfolio investment that could lead to a further depreciation of the rand. - A large trade deficit (currently at 6.8% of GDP). This is as a result of continued higher levels of imports compared to exports. Foreign inflows (especially portfolio flows) are needed to finance the deficit, and a withdrawal of these funds could result in a sudden depreciation of the rand. - South Africa receiving further rating downgrades, resulting in the country s sovereign rating to reach close to (or) junk status. This could result in further portfolio investment outflows as international investors re-allocate their portfolios to adjust for risk and return. - Political unrest and social instability before, during and after the national election scheduled for 7 May This could result in a depreciation of the rand, lower investment and lower economic confidence. - Increased service delivery failures by government and municipalities that could result in greater civil unrest and further service delivery protests. This could impact economic confidence and result in lower economic growth. - Unemployment levels (especially youth unemployment) as well as poverty levels remaining high, possibly resulting in civil unrest. - Credit amnesty coming into action, impacting the spending behaviour of consumers and, in turn, economic growth.
21 10 - Increased corruption, giving rise to higher business and consumer vulnerability levels as well as lower business and household confidence levels. - Redistribution of land without proper compensation. - Nationalisation of mines or other assets without proper compensation. - A sudden increase in inflation (above SARB s target range) as a result of exchange rate depreciation and increased prices of goods (ie food (meat) prices). Higher prices could increase living costs, especially for the poor. This may lead to further strike action as well as further hikes in the Reserve Bank s repurchase rate. Should SARB increase the repo rate too soon and too quickly as a result of higher inflation, this will result in slower economic growth and increasing debt burdens of consumers. - Extreme weather, influencing especially food security and water supply (ie droughts and floods). 1.5 CONCLUSION This chapter provided an overview of the macroeconometric model used to predict the economic performance of the South African economy, and ultimately retail trade sales, for 2014 as well as the potential risks that may influence the forecast. The next chapter presents a longitudinal analysis of retail trade sales by outlet and product group. This analysis also presents some comparative analysis between retail prices by outlet type and CPI. Such analysis is supplemented and concluded with forecasts for formal retail trade sales by outlet and product group for 2014, provided in chapter 3. The final chapter presents an overview and some concluding remarks.
22 11 CHAPTER 2 RETAIL TRADE SALES ANALYSES 2.1 INTRODUCTION Retail trade includes the resale (sales without transformation) of new and used goods and products to the general public for household use. By definition, a retailer includes any enterprise deriving more than 50% of its turnover from sales of goods to the general public for household use (Stats SA 2013). Retail sales figures provided by Statistics South Africa (Stats SA) cover retail enterprises according to the following types of retailers: General dealers o o Retail trade in nonspecialised stores with food, beverages and tobacco predominating Other retail trade in nonspecialised stores Retail trade in specialised food, beverages and tobacco stores o o o o o o Retailers in fresh fruit and vegetables Retailers in meat and meat products Retailers in bakery products Retailers in beverages Retailers in tobacco Retailers in other food in specialised stores Retailers in pharmaceutical and medical goods, cosmetics and toiletries Retail trade in textiles, clothing, footwear and leather goods o o Retailers in men s and boys clothing Retailers in ladies, girls and infants clothing
23 12 o o General outfitters Retailers in footwear Retailers in household furniture, appliances and equipment Retailers in hardware, paint and glass Other retailers o o o o o Retailers in reading matter and stationery Retailers in jewellery, watches and clocks Retailers in sports goods and entertainment requisites Retailers in other specialised stores Repair of personal and household goods Retail sales by mail order houses, vending machines, agricultural establishments, manufacturing establishments and the informal retail trade are not reflected in Stats SA s retail sales figures. Informal retail trade includes spaza shops (small outlets in the traditionally African townships, which provide convenience shopping for residents), street hawkers and the more organised flea markets, which have proliferated in most major cities and towns. However, it should be noted that some of the retail sales channelled through the informal sector might be sourced from the formal retail sector and could therefore be included in the retail sales figures of the formal sector. In South Africa, retail trade sales data are collected monthly from formal retailers mainly by Stats SA who samples approximately enterprises per month (Stats SA 2013). The results of the monthly retail trade sales data are used to, inter alia, compile estimates of GDP and to analyse business and industry performance. It should be noted, however, that Stats SA effected changes to the retail trade sales statistics during
i C O N T E N T S Page LIST OF TABLES... iii LIST OF FIGURES... v PREFACE... vii CHAPTER 1: INTRODUCTION AND RESEARCH METHODOLOGY 1.1 INTRODUCTION... 1 1.2 RATIONALE FOR METHODOLOGY... 2 1.3 MACROECONOMIC
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Quarterly Credit Conditions Report Contents List of Figures & Tables... 2 Background... 3 Overview... 4 Personal Lending... 7 Micro Business Lending... 9 Small Business Lending... 12 Medium-Sized Business