Consumer Watch – September 2021

The consumer market remains challenging although there are signs of normalisation as Covid-restrictions ease. The nominal food and beverage sales growth slowed to +44.2% y-y in July, while retail sales growth declined by -0.8% y-y.  Inflation pressures are mounting with the FAO food index increasing by 4 points to 127.4 points (implying inflation of 33% y-y), CPI inflation up by 30bps to 4.9% y-y and PPI inflation edging up from 7.1% to 7.2% in September. Petrol price is expected to decrease by 18c/litre (R17.30/litre), and diesel will drop by 9c/litre(R14.78/litre). The weaker rand (-0.7% m-m) could add to inflation pressures.

Vehicle sales growth continued in September, with the y-y growth rate at 15.3% (23.6% y-y in August), while the ABSA Purchasing Managers Index (PMI) dropped 1.1 points to 56.8. The growth rate of building plans passed eased to +31.6% y-y in July 2021, a slow down when compared to the prior months’ triple digit growth rates.  Private sector credit extension remains soft, increasing by +1.1% y-y in August.