Retail sales increase amid coronavirus outbreak

Retail sales have surprised on the upside in the first month of 2020. The latest Stats SA data shows that retail trade sales increased by 1.2% year-on-year in January 2020.

On a month-to-month basis, sales increased by 0.9% when compared with December.

In December 2019, sales fell sharply by 3.1% monthly – partly due to the reversal of the 2.0 increase in November, fuelled by Black Friday effects.

But analysts expect retail sales growth to come under pressure over the coming month as businesses respond to government measures to contain the spread of COVID-19.

Although the January retail sales figures were encouraging, it is yet to be seen how the spread of the Covid-19 will impact the February and March figures.

In January increased sales were seen in household furniture, appliances and equipment.

On this video, Retail sales surprisingly increase in January

They were closely followed by retailers in food, beverages and tobacco in specialised stores.

This week the rapid spread of the virus-induced panic buying among certain consumers, most stockpiling on items such as groceries, toilet paper and hand sanitizers.

This panic-buying behaviour has led to empty shelves at some local retailers.

There has also been concern about retailers hiking prices at this time to derive maximum profits.

Some people have taken to social media complaining about the increase in prices of sanitizers and masks.

On this post asks about a sudden increase of antibacterial hand wipes to which the retailers respond that the cost is based on the cost that it has incurred.

But not all retailers are going this route; others have announced that they would be keeping prices of hygiene products the same.

Meanwhile, Nedbank estimates that retail sales in categories such as food and beverages, and pharmaceuticals and medical could increase temporarily in the first quarter.

This will be due to panic buying for essential good as the spread of the coronavirus spread.

But it sees retail activity moderating as consumers steer clear of areas such as shopping centres to avoid contracting the virus.