Retail trading conditions for the holiday and back-to-school period is as difficult to predict as the outcome of the elective conference in December. For the time being, there is some good and some bad news. Based on the principle that you can’t sell it if you haven’t got it, a look at the sport equipment and fishing gear imported during the third quarter will give an indication what local distributors believe might sell well during the period. The information is based on import statistics supplied by the Department of Trade and Industry (DTI).
The value of sporting goods and fishing equipment imported into South Africa during the third quarter of this year tell a mixed tale: sporting equipment is 4% higher than the corresponding period in 2016 (R10-m more), but fishing equipment imports is 6% lower (R3.7-m down).
However, in the third quarter the value of fishing equipment imported was 31% higher than in the second quarter of this year, while sporting equipment was 11% lower than the second quarter of 2017.
Table tennis equipment seems to be popular with the value of equipment imported in the third quarter of 2017 a whopping 98% (R1.3-m) higher than the corresponding quarter last year, and 27% higher than in the second quarter of this year. This could be due to interest sparked by the Junior World Table Tennis Tournament held in Cape Town at the end of last year.
While the value of tennis racket and ball imports in Q3 2017 are 28% and 35% down from Q3 2016, the value of other rackets imported is 122% higher (R2-m more) compared to last year, and 37% more than in Q2 this year.
The value of inflatable ball imports is 11% up (R3.7-m higher) and other balls 19% (R3.4-m higher) compared to the same period in 2016. But, athletics and gymnastics equipment are 19% down (R35-m less) from the same quarter last year.
Golf imports remain flattish, with the value of clubs 4% up and balls at the same amount when compared to Q3 2016.
Good news from Statistics SA, however, is that local retail trade sales grew 5.4% when the third quarter is compared to the same period last year. Third quarter retail sales are also 1.4% higher than in the second quarter of this year. September sales were 0.7% higher than in August (seasonally adjusted), while retailers reported a 2.4% sales increase in August from July, when sales were 0.7% lower than the previous month.
Retailers in textiles, clothing, footwear and leather goods contributed 1.3 percentage points to the quarterly growth, with ‘other’ retailers contributed most at 2.1 percentage points.
Retailers can, however, still hope for a very good Christmas … if investor and consumer confidence is restored by a Cyril Ramaphosa win in December.
Now is the time to buy South African bonds because “the leadership of Zuma is coming to an end” and South African politicians are becoming more disciplined, Abdallah Guezour, head of Emerging Markets Debt at Europe’s biggest money manager, Schroders, this week told investors . Guezour also said South Africa should no longer be considered a ‘Fragile’ country by investors, reports BizNews’ Alec Hogg, who was one of 120 journalists from across the world who were this year invited to attend Schroders’ update on global investment markets. BUT, that entirely depends on whether Zupta rule comes to an end at the ANC’s elective conference, Guezour emphasised.
Looking at industry retailers’ performances so far this year, TFG seems to remain on a winning streak with group turnover 9.2% up (constant currency 12.6%) to a record R12.5-bn for the first six months of the year. According to the unaudited half year report, the group made R6.4-bn profit from retail sales. The performance of individual divisions, like the TotalSports, DueSouth and SportScene stores in the Sport division, is unfortunately not available.
News from Edgars continues to be depressing, though: their third quarter sales in the ‘speciality’ division, which includes Edgars Active and Edgars Shoe Gallery among others, dropped 11.4% when compared to the corresponding quarter last year. Edgars clothing’s sales were 0.9% down to R2.46-bn – but Edcon group profits increased 3.8% to R2-bn after they closed unprofitable stores.
“Our trading environment remains challenging as consumer demand is weak on the back of tight credit conditions, low growth in consumer disposable income, political uncertainty and restrictive fiscal policy,” Edcon CEO Bernie Brookes said.
Mr Price will present their half-year update next week. Once Competition Commission approval is received, Holdsport will become part of the Long4Life reporting cycle, with the next results only available next year.