Latest Report Counts Factors for Regained Retailers Confidence in South African

Released on: September 24, 2007, 5:10 am

Press Release Author: Shushmul Maheshwari

Industry: Retail

Press Release Summary: High consumer spending has brought back the smile on the
faces of South African retailers. Retail volumes posted good growth in Q2 2007 and
are expected to tread the same path in future too.

Press Release Body: Higher consumer spending in the second quarter of this year has
brought back the confidence of South African retailers and this is despite the high
interest rates.

“South African Retail Industry Forecast (2007-2011) \", an extensive market
research report published recently by the leading market research company RNCOS, has
identified stable monetary and fiscal policy, high credit sales, negative saving
level, and the emergence of strong black middle socio-economic class as the forces
propelling the consumer spending in South Africa and is bringing a change in
spending pattern.

The data from the Bureau for Economic Research (BER) also proves this; according to
it, retail confidence has spiked to 91 index points (this is equal to level achieved
in quarter four of 2006) from 87 index points in the quarter one in 2007.

There are other reasons too for this appreciation in consumer confidence. Linette
Ellis, senior economist at BER, opined that the hike in consumer spending was
sparked by a combination of credit and disposable income, as reported by all And appreciation of salaries above inflation level also pushed the real
disposable incomes in line with growing spending.

But according to Statistics SA (the official statistical website of South Africa),
the retail volumes slowed down a little from previous year’s volume growth of
9.6% to 9.5% on year on year basis in the Q2 of 2007. This slump, as per the RNCOS
report, is a result of some growth containing factors, including negative population

Segment-wise, non-durables like food and beverages registered good growth while
sales of semi-durables sector like footwear and clothing bounced back in the second
quarter of 2007. Durable sector (household appliances, electronic goods, and
furniture), the most sensitive retail category towards hike in interest rates,
slumped slightly from the outstanding pace it clocked in during 2006 end and in Q1
of this year.

On the whole, retailers anticipate concrete and continuous growth in the Q3 of this
year, Business Report quoted Linette saying on June 22, 2007. The RNCOS report
predicts the whole retail industry to grow at a CAGR of over 5% from 2007 to 2011.

The report also examines the areas this swelling South African retail industry will
affect favorably and discusses the future vistas.

About RNCOS:

RNCOS, incorporated in the year 2002, is an industry research firm. It has a team of
industry experts who analyze data collected from credible sources. They provide
industry insights and analysis that helps corporations to take timely and accurate
business decision in today\'s globally competitive environment.

For more information visit:
Current Industry News:

Web Site:

Contact Details: RNCOS E-Services Pvt Ltd.
Shushmul Maheshwari
Head of Business Development
29, 1st Floor, Patparganj Industrial Area, Delhi 92

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