Publications
Partners
Johannesburg - Consumers are cutting back on less affordable purchases within the food and beverage retail sector, according to John Loos, household and property sector strategist at FNB.
This is according to February figures for the food and beverage retail sector, which shows virtually zero real growth, said Loos.
This sector relates to restaurants, coffee shops, fast food, take-away outlets and caterers.
"Luxury purchases are remaining under pressure in a constrained financial environment," said Loos.
"Caterers’ income growth has suffered the most in this sector and by type of product we have seen total bar revenue being affected most," said Loos.
For the three months to February, catering income growth was still in decline to the tune of -2.6% year-on-year.
"Bar income has a tendency to be far more cyclical than food sales it would appear," said Loos.
"The last time we saw a noticeable decline in the value of bar sales was in and around the 2008/'09 recession."
By comparison, the more affordable take away and fast food sector income grew the fastest at 7.9%, while restaurant and coffee shop income was a slower 3.5%.
At the same time the sales figures of the mainstream retailers continue to paint a reasonably satisfactory growth picture, having measured 2.2% real growth in February, according to Loos.
"Starting the year on such a weak note, compared with 2013’s strong start in the area of food and beverage retail, further contributes to our expectation of a weaker growth year for the SA household sector," said Loos.
"This is in terms of real disposable income growth and thus overall real consumer demand."
After a 2.6% real growth rate in overall household consumption expenditure in 2013, 2014 may well see growth slow to nearer to 2%, he said.
This is according to February figures for the food and beverage retail sector, which shows virtually zero real growth, said Loos.
This sector relates to restaurants, coffee shops, fast food, take-away outlets and caterers.
"Luxury purchases are remaining under pressure in a constrained financial environment," said Loos.
"Caterers’ income growth has suffered the most in this sector and by type of product we have seen total bar revenue being affected most," said Loos.
For the three months to February, catering income growth was still in decline to the tune of -2.6% year-on-year.
"Bar income has a tendency to be far more cyclical than food sales it would appear," said Loos.
"The last time we saw a noticeable decline in the value of bar sales was in and around the 2008/'09 recession."
By comparison, the more affordable take away and fast food sector income grew the fastest at 7.9%, while restaurant and coffee shop income was a slower 3.5%.
At the same time the sales figures of the mainstream retailers continue to paint a reasonably satisfactory growth picture, having measured 2.2% real growth in February, according to Loos.
"Starting the year on such a weak note, compared with 2013’s strong start in the area of food and beverage retail, further contributes to our expectation of a weaker growth year for the SA household sector," said Loos.
"This is in terms of real disposable income growth and thus overall real consumer demand."
After a 2.6% real growth rate in overall household consumption expenditure in 2013, 2014 may well see growth slow to nearer to 2%, he said.
