South Africa’s retail trade expanded 3.6% year-on-year in the third quarter of 2025, signalling a tentative consumer rebound despite persistent economic pressures.
Preliminary data from Statistics South Africa shows that September retail activity rose 3.1% year on year, even as month-on-month growth remained flat. The strongest performer was household furniture, appliances, and equipment, which jumped 11.4%.
General merchandise added 0.9 percentage points to overall growth, textile and clothing retailers contributed 0.7 points, and hardware outlets provided a further 0.5 points. Seasonally adjusted sales edged up 0.9% from the previous quarter, following an earlier setback when activity dipped 1.6% in August.
Durables lift growth, but fragilities persist
The latest data underscores both resilience and uneven gains across sectors. General dealers – representing nearly half of all retail activity – expanded 1.9% in the quarter, while textiles, clothing, footwear, and leather goods rose 5.2%.
Hardware and home-improvement outlets climbed 8.4%, reflecting continued household investment in long-life goods. But specialized food, beverages, and tobacco stores shrank 1.4%, highlighting pressure on essentials as consumers navigate tight financial conditions.
“Consumers are showing confidence in durable purchases, in particular household goods and hardware, which often signals medium-term financial stability,” Johannesburg-based economist Peter Mokoena told Allen Dreyfus.
“But the flat month-on-month trend in September tells us households remain cautious. Inflation and borrowing costs are still squeezing discretionary spending, especially in clothing and footwear, which slipped 0.6% quarter-on-quarter.”
Analysts say demand has stabilized somewhat following mid-year volatility. A sharp decline in August was followed by a mild rebound in September, suggesting households are adjusting to higher borrowing costs and elevated inflation. Strong furniture and hardware sales point to persistent interest in big-ticket items, often associated with confidence among middle-income earners.
South Africa’s retail stability also carries global implications
“Retail growth here has spillover effects for import demand from Asia and Europe,” said Mokoena. “It reflects stabilization in consumer sentiment, which is critical for global exporters navigating sluggish demand elsewhere.”
Outlook hinges on energy costs, currency moves
Seasonally adjusted sales reflect cautious optimism heading into the final quarter, though risks remain. Rising energy costs and currency volatility could weaken household purchasing power, while uneven sectoral performance highlights structural vulnerabilities.
Still, economists note that momentum in household furniture and hardware spending could bolster overall consumption, laying a firmer foundation for sustained growth.
As the festive season draws nearer, retailers will look closely at whether stabilizing demand can translate into stronger year-end sales. The October retail report – due in December – will indicate whether the recovery broadens beyond durable goods into more discretionary categories.
