Trading Economics had forecast an increase of 0.5% for November while the Bloomberg consensus forecast was for a 0.3% decrease.
FNB Senior Economic analyst Jason Muscat said the growth seen in November was a result of consumers delaying purchases in October to take advantage of Black Friday deals in November.
“We expect that the revival in the month will be short-lived, and that year-on-year December sales will disappoint given high levels of pre-December buying (Black Friday) and this morning’s 6.8% year on year inflation print for [December],” Muscat said.
Rising unemployment and high levels of indebtedness have constrained consumer spending and confidence. Lenders have also been tightening up their lending criteria.
Muscat said analysts expect slightly higher household consumption growth levels in 2017, but it is unlikely consumers will get relief on interest rates given December’s inflation numbers.
He said the February budget speech would provide a clearer picture of what to expect in terms of fiscal tightening and likely tax increases.
General dealers were the main contributors to November's retail sales increase, accounting for two percentage points.
Retailers in hardware, paint and glass posted the biggest sales increase, at 5.4%, followed by retailers in pharmaceuticals and medical goods, cosmetics and toiletries, which grew by 4.9%
Seasonally adjusted retail trade sales grew by 3.5% month on month in November 2016.
The persistent pressure on the sector has been evident in retailers’ recent operational updates.
The severe drought has driven up food prices up, which has hurt food retailers’ margins.
Among food retailers Shoprite is the only one to have reported sales growth — mainly supported by the group’s operations across the continent.
Woolworths, which caters to higher-income consumers who are more resistant to economic pressures, nonetheless reported a slide in food sales volumes last week.
Among clothing retailers only TFG show sales growth in the highly competitive industry.
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