Wholesale and retail trade

The wholesale and retail trade sector in South Africa is the third largest contributor to the Gross Domestic Product (GDP) in South Africa. Not only does this sector provide a large number of employment opportunities, but it also helps to boost the economy of South Africa.

Over the last few years, South Africa has undergone a transformation from a primary sector based country to a tertiary sector based country. This had to effect that there was more attention given to the wholesale and retail trade industry, than to the manufacturing industry.

This shift also brought on some other changes. South Africa now would rather import and sell items, than to manufacture it here in South Africa. It should also be kept in mind that South Africa still has a very active and well sustained manufacturing industry.

Statistics South Africa is the country’s leading researcher and data capturing institution. Statistics play a major role in predicting the future and remains an important tool to learn from the past. Statistics SA produces a survey on a monthly basis, on the activities and happenings in the wholesale and retail trade industry. This survey covers a wide variety of wholesale and retail trade enterprises in South Africa. These enterprises include some of the following retailers:

  • Appliances
  • Beverages
  • Clothing
  • Cosmetics
  • Equipment
  • Food
  • General dealers
  • Hardware
  • Household furniture
  • Pharmaceutical and medical goods
  • Textiles
  • Tobacco
  • Toiletries
  • Various other dealers

There has been an increase seen over the last few years in the prices of the products of these retailers. The largest increase was recorded in 2006. The increase from 2005 to 2006 came to stand at a staggering 9,7%. According to statistics SA, this was the largest increase that they saw for any year since 2000. This increase could be the result of an increase in the inflation rate and/or an increase in the petrol price.

This drastic increase in prices had to effect that the retail sales growth decreased in the third quarter of 2006 by a shocking  9,1%. This made the overall economic conditions in South Africa somewhat tougher. Shortly after, in 2009, the economy, worldwide, took an extreme knock with the recession that shook the entire market.

A list was drawn up to identify the major retailing groups that showed the largest contribution to the economy. The groups were the following:

  • Edcon
  • Ellerines Holdings
  • Massmart
  • Pick ‘n Pay
  • Shoprite Checkers
  • The Foschini Group
  • The JD Group
  • The Mr Price Group

Trade unions also play an influential role in this sector. Trade unions were established to be the mediator between the employees and the employer. When employees are allowed to join trade unions, the trade union will see to it that the rights of the employees are protected and that there is no discrimination or impairments in the employees’ workplace.

Despite all of this, the wholesale and retail trade industry showed a 10% growth in 2013. This goes to show that South Africa has the ability to recover very well after a major international economic crisis. Even with multiple obstacles and challenges, this growth was possible.

This goes to show what South Africa is capable of. Even when the cost of living rises, the industries in South Africa can still achieve growth. More and more investors will notice this and South Africa will be put on the map once again.

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