“However, it would appear that what growth in sales there is, is more due to price inflation than to any real growth,” FNB household and property sector strategist John Loos said.
The latest statistics pointed to weaknesses in growth in this sector — a phenomenon experienced since mid-2013.
“This is further reflection of the combination of a weak economic growth rate and rising consumer price inflation, which in turn has led to slow household disposable income growth,” Loos said.
The “luxurious” food and beverage sector was the hardest hit.
“For the three months to March, catering income grew very slightly, to the tune of 0.7 percent, although this surely remains negative in real terms,” Loos said.
“By comparison, the more affordable take-away and fast-food sector income continued to grow the fastest at 8.3 percent, while restaurant and coffee shop income was a slower 3.3 percent.”
Bar sales showed a 3.4 percent decline in the first three months of the year compared to the same period last year when sales grew by 16.8 percent.
“The last time we saw a noticeable decline in the value of bar sales was in and around the 2008/9 recession,” Loos said.
“The nominal decline is despite the consumer price inflation rates for the different categories of beverages not showing inflation that is out of line with broader economy-wide inflation.”
Food sales at restaurants grew by 5.7 percent year on year.
“The food and beverage sales figures for the restaurant and catering sector continued to paint a very weak picture in March, following on weak sales figures for March for the mainstream and motor vehicle sector retailers too,” said Loos.
“The March food and beverage numbers provide still further support to our view that overall household consumption expenditure growth will dip to below two percent… for 2014, down from a 2.6 percent rate for 2013.”