SA Retail – Running out of trump cards

Our analysis shows that the retail market in 2016 may have been boosted by factors other than the consumer wallet growth. In our view, some of these factors may not be sustainable and could potentially wane in 2017. We believe the spending power of the consumer in 2017 may further weaken with an increase of only 3.1% y-y nominal. We believe the year ahead is likely to be challenging for the retailers and buying opportunities in the sector may be limited.