Growing Buying Power of Consumers - Key Driver For Growth in Retail Sales in SA
Released on = June 10, 2007, 10:25 pm
Press Release Author = Shushmul Maheshwari
Industry = Retail
Press Release Summary = Owing to the increase in spending power of South African consumers, the retail market registered an impressive annual growth rate of 101% in the 1Q of this year (2007).
Press Release Body = As per a recent report on “South African Retail Industry Forecast (2007-2011)\" published by RNCOS, it has been found that South Africa would witness a moderate growth in the real disposable income - the key driver for consumer spending - during the period spanning 2007-2011. Consequently, retail sales would also increase in the country.
Retail sales in South Africa grew 10.1% year-on-year during March this year (2007). Besides pointing towards persistently growing consumer spending, this growth also supports the case for elevated interest rates in the country. REUTERS published this on May 16, 2007.
Strong consumer appetite remains the key driver behind this rapid growth in the largest economy of Africa over the past few years. Statistics South Africa, the national statistics board of S.A., has said that the retail sales accelerated from an annual 8.0% this February, and grew by 9.3% in the first quarter of this year compared to same period last year (2006).
Increase in spending has resulted in skyrocketing the household debt to 73.8% of disposable income. Imports were further boosted by the run off consumer demand, as domestic supplies weren’t adequate to meet the need, as a result depressing Rand and keeping trade-balance in deficit, as reported by REUTERS on May 16, 2007.
As per the RNCOS report “South African Retail Industry Forecast (2007-2011)\", “S.A. is the most developed retail market in the entire MEA (Middle East and Africa) region. Although sales plunged during the year 2002 in dollar terms owing to significant depreciation in Rand during that period. But, from 2001 to 2006 overall retail sales grew at a CAGR value of 15.53%. In 2006, total sales were estimated around US$ 85.72 Billion, 7.39% up from previous year (2005).”
This report analyzes: market size and scope of growth of the retail industry in South Africa, growth prospects and issues related to the industry, factors driving growth in this sector, opportunities & challenges before the retailers in South Africa, and various other issues critical to the success of retail industry in S.A.
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