Retail sales fell by 0.9% in January compared to December in seasonal- and working-day adjusted terms but still rose 11.4% from a year ago. Digging further into details, we see that on an annual basis, non-food items grew by 17.2% (-1.8% from the previous month), down from 18.0% YoY in December, but quite impressive nonetheless. Fuel and food items followed the same pattern, expanding by 7.9%/8.5% YoY but falling in monthly terms by 1.2%/0.1%.
Retail sales gyrating south
Consumer sentiment weakening across the board
This is in line with soft consumer confidence data, which has been on an accelerated downtrend since reaching an all-time high in March 2017. Overall, it appears that higher interest rates and inflation, a weaker currency and uncertainty about future income (due to fiscal changes) have started to take a toll. A change in government at the start of the year may have also had a negative impact on consumer morale. And with recent government pay rises targeted only at certain professionals, it would appear the consumer is running out of steam.