Retail sales contracted for the second consecutive month in November

High-income households and tourists offer resilient sources of demand in an otherwise sluggish market

To grow sales in South Africa’s large but stagnant consumer market, firms will need to capture market share among resilient consumer segments including high-income households in Johannesburg, Cape Town, and Durban. Firms should also consider incentivizing distributors to focus on growing sales in tourist hotspots, including in the Western Cape. Raising brand awareness through marketing campaigns and promotions will help counter trading down to cheaper alternatives by price-sensitive consumers. Firms selling low-priced products to low- and middle-income households should consider reviewing product portfolios or package sizes in tandem with pricing strategies to protect sales. To protect margins amid muted sales growth, firms should consider ways of cutting costs to protect margins.


  • Retail sales (adjusted for inflation) fell 2.3% YOY in October and 0.9% YOY in November 2023, On a seasonally adjusted basis, sales in November were ZAR 3.7 billion (USD 197 million) lower than the record high recorded in June 2021.
  • The decline in sales in November was largest for retailers of hardware, paint, and glass (-5.3% YOY); pharmaceuticals, cosmetics, and toiletries (-3% YOY); specialty food, beverages, and tobacco (-2.3% YOY); textiles, clothing, footwear, and leather goods (-2% YOY); and household furniture and durables (-0.2% YOY). Only supermarkets mustered growth (+0.3% YOY).
  • Consumer confidence, as measured by the FNB/BER Consumer Confidence Index, fell from -16 in Q3 2023 to -17 in Q4 2023. (A negative figure means consumers expect economic growth to deteriorate and believe it is not a suitable time to purchase durable goods). Most consumers remain worried about the impact of load shedding (power shortages) and weak public finances.

Our View

Consumer sentiment—and therefore retail activity—will remain downbeat over the coming year: FrontierView has downgraded its consumer spending growth forecast to 0.8% YOY for 2024. Purchasing power among low- and middle-income households will be constrained by muted civil service wage growth, high (albeit falling) unemployment, and rising food price inflation. High costs of consumer credit will suppress demand for products usually financed with credit (such as durable goods), because the South African Reserve Bank will resist large cuts to its benchmark interest rates to minimize the rand’s volatility. Meanwhile, demand for discretionary spending will dip in the weeks ahead of the May general election, recovering only when it becomes clear that risks of political violence have receded. High-income households will remain a resilient (if not growing) customer segment given their job security and healthy annual wage increases. The tourism industry also offers new opportunities given the steady recovery in arrivals of high-spending European tourists in recent months.

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