24 July 2020 – South Africa’s retail sales plunged by a record 50.4% in April and 12% in May, data showed on Wednesday in the latest evidence of the impact of the early, stricter phase of the country’s coronavirus lockdown.
At the end of March, President Cyril Ramaphosa took early action, shutting restaurants, banning alcohol and tobacco sales, while ordering people to stay at home and sending the army on to the streets to enforce it.
The government later eased many curbs as concerns mounted over its struggling economy, but it reinstated the alcohol ban. The remaining restrictions on tourism have also prevented retail from rebounding as much as manufacturing and mining.
Statistics South Africa said the April annual figures were the lowest since 2002 when the agency began compiling the data.
On a monthly basis sales were up 74.2% after a 50.7% contraction in April. Quarterly sales dropped 19.5%.
Retail and trade accounts for around 15% of gross domestic product, the third largest sector, after finance and government services, but increasingly indebted consumers kept indoors by lockdown are unlikely to increase spending soon.
The central bank has slashed lending rates by 275 basis points since January to stimulate spending and is set to cut rates again on Thursday, but economists argue that will not be enough to revive the consumer sector. Source (Moneyweb)