South Africa's retail sales up 1.3 percent year/year in July

South Africa’s retail sales rose in July as furniture and clothing sales grew, data showed on Wednesday, as retailers battle to lift earnings amid poor economic growth that has sent the economy into its first recession since 2009.

Sales rose 1.3 percent year-on-year in July after increasing by a revised 1.8 percent in June, the statistics office said.

Trade accounts for 15 percent of gross domestic product, and improved demand is seen as pivotal to stimulating economic activity and create jobs to ease record-high unemployment.

“The figure is good, it shows that maybe H1 wasn’t so bad. But there are still many headwinds for the household sector going forward so I see the sector remaining strained,” said Elize Kruger, analyst at NKC Economics.

Africa’s most industrialised economy slid to a recession, data showed last week, with household expenditure showing a 1.3 percent decline as elevated debt, higher fuel prices and an increase in value-added tax battered cash-strapped consumers.

Retailers are struggling to lift earnings amid the poor economic growth, with continental grocer Shoprite, seen as a barometer of consumer and retail health, reporting its first annual earnings decline in 19 years in August.

Faith in President Cyril Ramaphosa’s ability to revive the economy after his election in February on a promise of business-friendly reforms is flagging, with business and consumer confidence declining, having risen on the prospects of his promises to revive the economy.