The Pentad – Urban Retail Price Tracker December 2017
- Another Black Friday came upon us. The biggest retail period of the year failed to fundamentally shift underlying trends in spending as depressed income and less promotion remained the culprit. First off, while market feedback suggests volume increase across our coverage, we link the increase to festive-induced demand (like prior years) rather than Black Friday sales as volumes growth was relatively weak. With inflation exceeding wage growth amid high interest rates, consumers are turning more cautious than last year. In fact, retailers have adjusted to this by spreading deals across several weeks. More so, while price pressure sustained its moderation in November, the bulk of the pressures occurred in the last week of the month. To our minds, retailers seized the festive-induced window to preserve margins.
- Our Urban Retail Price Tracker—the PURP index—recorded a modest increase of 0.78% MoM to 102.0 ppts (vs 0.79% MoM in October and 0.82% MoM October urban inflation reported by NBS). We saw mixed retail price stories across our coverage segments with an overall modest pace of price increase. Like last month, sales volumes climbed higher underpinned by festive-induced demand as well as the end of the rainy season. Survey result showed a 0.6% decline in retail prices in the first three weeks of November followed by a 1.3% increase in the last week of the month.
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