Retail Confidence Falls in South Africa: What It Means for Shoppers

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South Africa’s retail sector is showing signs of slowing down, according to the latest Bureau for Economic Research (BER) Retail Survey for Q3 2025.

Business confidence among retailers retreated to 32%, down from 42% in Q2, marking a 10-point decline and falling below the long-term average of 40% for the first time in a year.

Despite the drop, the BER notes that overall profitability remains relatively favourable, with most underlying activity indicators hovering around their long-term averages.

Wholesale Sector:
After five quarters of outperformance, wholesaler confidence also declined, dropping from 50% to 38%, indicating a more challenging operating environment. Business conditions ticked up slightly but remained just below the long-term average.

Bright Spots in Retail:

• New Vehicle Dealers: Confidence surged by 12 points to 54%, its highest since 2022Q1, despite slower volume growth. The sector shows resilience but may have reached a peak in activity as the SARB’s interest rate cutting cycle comes to an end.

• Furniture Retailers: Continuing to perform relatively well, highlighting that higher-income consumer spending is sustaining certain segments of the market.

Key Takeaways:

• Retailers’ confidence was stronger than in early 2024, but the pendulum appears to be swinging downwards in the second half of 2025.

• The slowdown in consumer demand reflects fewer tailwinds to spending, including reduced two-pot withdrawals and low inflation support.

• While some sectors remain resilient, the overall retail and wholesale environment is facing headwinds.

Conclusion:
The BER’s Q3 survey underscores a cautious outlook for South Africa’s retail sector. Businesses may need to adapt strategies, focus on cost management, and target resilient consumer segments to navigate the expected slowdown.

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