Retailer confidence in South Africa declined in the second quarter of 2025, falling from 50% to 42% according to the latest Bureau for Economic Research (BER) Retail Survey.
According to the survey, confidence levels, although sliding, remain slightly above the long-term average of 40%.
“Retailer confidence suffered due to deteriorating business conditions and underlying activity indicators, such as sales and volumes of orders placed, though these also remained above long‑term average levels,” the survey said.
"The trend suggested a moderation in retail sales growth, particularly as two‑pot withdrawal‑fuelled spending winds down."
According to Statistics South Africa, real retail sales expanded by 4.1% year‑on‑year (y-o-y) in the first quarter of 2025, following a 5.4% gain in the fourth quarter of 2024.
However, the BER’s latest survey results point to “a more subdued sales outlook, with the retail sales volumes index in 2025Q2 declining on a seasonally adjusted basis”.
New vehicle dealers’ confidence pulled back, falling from 52% to 42% in the second quarter, though still above long‑term averages.
“Business conditions disappointed against expectations, and the sales volumes index moved noticeably lower, supporting a less cheerful mood among new vehicle dealers,” the BER said.
However, new vehicle sales remain robust, with The Automotive Business Council (Naamsa) data showing a 30% y-o-y rise in May, coming off a low base due to May 2024 being an election month.
Wholesaler confidence recovered sharply in the second quarter, rising eight percentage points to 50%, with sentiment boosted by an improvement in the non‑consumer goods sector.
However, the sales volume index of consumer goods wholesalers declined steeply.
“This is potentially an early warning sign that the consumer might be under pressure, making retailers cautious about overstocking,” the BER said.
Among retailers, sentiment varied across sub‑sectors.
“Confidence among durable goods retailers declined, with weaker sentiment among hardware retailers offsetting a rise in confidence among furniture retailers. Furniture retailers replaced semi‑durable retailers as the most confident group in Q2,” according to the survey.
However, semi‑durable retailers’ confidence fell from its multi‑decade high, although “more than half of semi‑durable retailers still reported being satisfied with prevailing conditions”.
The BER added that its survey results did not suggest a reacceleration of price pressures despite slightly elevated selling prices in some retail segments.
“The findings indicate a lack of pricing power among non‑durable goods retailers, constraining the profitability of food retailers in particular.”
The survey revealed that the decline in retailer confidence was not surprising “given the collapse of consumer confidence in the first quarter amid the spectre of a VAT hike and rising fuel levies”.
However, mild inflation, favourable oil prices and less restrictive monetary policy were expected to provide some relief for consumer spending, despite rising pressure from tax bracket constraints.
“In sum, the retail and motor trade results suggest consumers likely held up reasonably well in the second quarter. That said, the drop in wholesalers’ sales of consumer goods raises concerns that consumer demand, which to date has been surprisingly resilient, might begin to wane in the latter half of the year,” the BER said.
