That cutback in spending translated into a 4% drop in sales at constant prices year-on-year in November, and a 4% drop in sales for the three months ended in November, compared with the same period in 2007.
Retail trade sales at constant prices for the same period in 2007 increased by 1.1%.
And retail trade sales at constant prices for the first 11 months of last year declined 2.4% compared with the first 11 months of 2007.
Sales growth for the comparable period in 2007 was 5.8%.
Nedbank economist Carmen Altenkirch said consumers were still burdened by the effects of interest rate hikes since mid-2006.
“It is a combination of still high interest rates and deteriorating confidence.
“It doesn't seem likely it will improve much as there is an increasing chance we will see job losses, which will cause confidence to deteriorate further,” he said.
“Consumers will get some relief as interest rates come down, but unless confidence improves, it won't encourage them to go out and spend,” said Altenkirch.
She added that consumers might choose rather to save or pay down debt instead of spending.
“Durable goods are likely to have been hardest hit, as deteriorating confidence makes people reluctant to purchase big-ticket items.
Sales of discretionary items such as clothing and furnishings are also likely to be under pressure as consumers cut back on non- essentials to pay back debt, increase savings or purchase necessities.”
Johan Botha, economist at Standard Bank, said despite recent positive trading updates from local retailers, the overall trend was downwards.
“This is the seventh month of declining retail sales. It is a reflection of a weak economy. The economy is not growing, jobs are not being created, inflation is going up and households are under pressure; they do not want to spend money.”
Source: The Times
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