The trends in the health of the consumer appear to be improving, underpinned by real wage increases and improving employment, but dampened by signs of over-indebtedness within the middle-income consumer.

Whilst inflation, as measured by CPI, rose above the upper limit of the SARB target of 6.0%, consumers have enjoyed a much lower inflation rate (only 1.1%) in the products they bought through our stores. Driven partly by the weaker Rand and by increased commodity prices, our Food inflation of 2.0% was the highest of our main categories during the period. General Merchandise remained in deflation and was 6.1% caused mostly by continued imported deflation and the benefits of hedging our imports.

The increasing complexity of the regulatory environment has required an investment in compliance. Given the high costs of compliance, these trends have inadvertently made it more difficult for smaller retailers and suppliers to compete.

The underlying cost pressures in services, electricity and transport require a greater investment in productivity gains. This, at the same time as the proposed onerous labour legislation, will put a strain on employment levels and labour relations.

The political stability on the African continent remains variable with some of the gains of the last ten years being lost as countries struggle with political transitions.