South Africa’s retail sector delivered another strong performance, indicating that consumers continue to prioritise discretionary spending—particularly on clothing. According to Statistics South Africa, inflation-adjusted retail sales rose 4.20% year-on-year, a slight slowdown from the 5.20% growth seen in April. When adjusted for seasonal factors, sales edged up 0.10% compared to April, underscoring sustained but moderated monthly momentum.

This uptick highlights the resilience of consumer spending, as demand for non-essential items remains strong despite economic pressures. Clothing retailers led the way, sustaining their robust growth and significantly contributing to the overall retail momentum that began in April 2025.

While May saw a slower growth rate following April’s sharp surge—driven by promotions and new seasonal lines—the momentum persisted, though at a more measured pace. This deceleration reflects a shift toward sustainable growth, not a sign of weakness.

A month-on-month gain of 0.10% indicates that retail demand remains relatively stable, with consumers continuing to shop at brick-and-mortar stores even as inflationary pressures persist.

The broader context underscores why this performance matters. Many households are grappling with rising living costs—housing, transport, and food inflation have weighed on budgets. Nevertheless, consumers appear to be selectively allocating funds towards clothing and other discretionary items, reflecting a willingness to spend where value or utility is perceived.

Analysts suggest that clothing’s continued allure may be driven from a combination of factors: new seasonal inventory, effective promotions, and pent-up demand following several months of economic uncertainty and higher interest rates. These trends mirror earlier months when clothing and footwear sectors consistently outperformed the general retail landscape. Looking ahead, retail experts anticipate some cooling in clothing led growth. The strong base set in April and May could lead to slower year-over-year comparisons in coming months. Additionally, broader economic headwinds, including unemployment and inflation, may exert downward pressure on discretionary spend.

Nonetheless, the May figures reinforce a reassuring narrative: consumer demand remains solid, especially in the fashion space. Although growth has moderated, the sector hasn’t retraced significantly, delivering a cautiously optimistic outlook for retailers.

South Africa’s retail sales

Bottom Line

Despite muted GDP growth, it looks like certain sectors in the economy are showing early signs of improvement. The recent interest rates cut will support economic activity. The key question remains whether policy reform can enable a more sustained improvement in growing the economy sufficiently to promote employment growth.

Macroeconomics in brief

23 July Macro economics in brief image