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The total retail sales for March had fallen by the most in more than six years, Statistics SA said yesterday.

May 15, 2008

By Tom Robbins

Cape Town – The total retail sales for March had fallen by the most in more than six years, Statistics SA said yesterday.

Stats SA said overall sales at constant prices, which strip out inflation, had fallen 1.7 percent year on year in March. Sales for the three months to March managed to rise 0.6 percent, which was sharply lower than the 9.5 percent increase in the same quarter last year.

Abri du Plessis, the chief investment officer at Gryphon Asset Management, said people across all income groups were cutting spending on pricier food items.

Du Plessis cautioned that big-ticket sales in March, such as furniture, would have been hit by fewer trading days in the month, caused by the early Easter holidays.

Mike Prentice, a Spar group merchandise executive, said the rand value of the consumer basket in rural Limpopo had remained the same, but the volume of food had fallen due to high prices.

This led the company to believe this trend would be no different in other rural areas, where the country’s poorest lived.

Commentators argue that recent steep rice price hikes are sending consumers scuttling back to maize as a basic staple, but that has risen too.

Afgri said that falling chicken sales and other anecdotal evidence suggested that national food volume sales were declining.

Maize storage is Afgri’s biggest business.

But Nedcor Securities retail analyst Syd Vianello said the fact that food and detergent suppliers could not keep shelves stocked meant supermarkets were nevertheless squeezing out volume growth.

Arthur Kamp, an economist at Sanlam Investment Management, said there was evidence of “a marked slowdown” in food volume sales growth in the fourth quarter of last year.

This pointed to a further weakening this year.

Kamp said that continued job creation could keep real food sales positive, “but I would not be surprised if they declined”.