By Siphamandla Mkhwanazi
Retail sales wane in December
Retail sales growth decelerated to 2.6% y/y in December, down from 3.6% in November (revised from 3.5%), undershooting market expectations of a 3.1% expansion. On a month-on-month basis, sales volumes declined by 0.4%, partly reversing the 0.6% increase recorded previously. Nevertheless, quarterly volumes remained up by 0.8%, suggesting another positive contribution to 4Q25 GDP growth. For 2025, retail sales grew by 3.7% y/y. Excluding the pandemic-induced data disruptions in 2021, this represents the fastest pace of growth since 2012, reflecting an improving consumer environment.
Performance by type of retail shop
Growth in December was once again broad-based across most segments, with all categories except specialist food and beverage retailers recording an expansion. The latter declined sharply by 5.6% y/y, detracting 0.5-percentage points (ppts) from headline growth.
Outlook
Retail sales are expected to maintain positive momentum this year, supported by stronger household balance sheets, improving purchasing power, and a monetary policy stance that is expected to become more neutral. In addition, multi-year wage agreements across key sectors should provide a meaningful lift to disposable income, supporting both discretionary and essential spending. As a result, retail activity is likely to contribute positively to the overall economic performance into 2026.
