Business Opinion

40-year-old South African retail giant set for major gains

Luke Fraser

 ·16 Sep 2025

PSG Wealth’s Fisokuhle Mbutho says Mr Price is an undervalued stock, with the retailer set for further market share gains

Founded in 1985, Mr Price has become one of the largest retailers in South Africa, and offers fashion, homeware, and cellular services.

The investment firm’s analysis has been updated to incorporate the latest trading update from Mr Price for the 13 weeks ended June 2025. 

In the update, the group noted that retail sales increased by 6.3% to R9 billion, and comparable store sales grew by 3.0%. 

The retailer also saw market share gains of 10 basis points over the quarter, having gained over R300 million in market share from its competitors from the prior year. 

A rise in retail sales was boosted by a timing shift of Easter holidays into April and strong sales growth in May due to a timely winter season against a weak base of negative sales growth amid pre-election consumer restraint in 2024. 

That said, June 2025 saw a decline in retail sales compared to June 2024, which was boosted by the late onset of winter and a rise in consumer confidence following the election. 

Although the group anticipated softer sales growth for June 2025, the impact of a shift in school holidays from the last two weeks into July was greater than expected. 

Overall, trading space increased 3.7% on a weighted average basis. The company saw its store footprint increase by 31 stores (net), and the group’s total footprint expanded to 3,061 stores. 

Looking at the specifics, the apparel segment saw a 6.0% increase, the homeware segment 6.4%, and the telecommunications segment 12.7%. 

PSG Wealth’s perspective

In his analysis, Mbutho noted that Mr Price is undervalued, given its stable revenue growth and earnings. 

PSG Wealth has an intrinsic value of R286 per share for Mr Price, far higher than the current market price of around R211. 

The recommendation is based on MR Price trading at low availabilities and attractive levels. 

The group is also expected to benefit from an improved consumer environment, with low inflation and interest rates set to help consumer finances. 

Mbutho added that Mr Price is set to see market share and long-term growth gains, stemming from the group’s organic brands and expanding on acquired ones.

The organic brands refer to Mr Price Kids, Mr Price Cellular and its other spin-off brands across South Africa. 

Regarding acquired brands, Mr Price has purchased Yuppiechef, Power Fashion and Studio 88 since 2021. 

The group has been on a massive rise in its store base, with the total number of stores having more than doubled from its 1,400 stores seen in 2021. 

Regarding financials, Mr Price is preferred by PSG Wealth due to the higher fundamentals, including stable margins & earnings growth. 

The group also has far lower debt levels than its competitors. The group also trades at a lower forward price to earnings ratio (P:E) than its rival Pepkor. 

Although it has a similar P:E to Woolworths, the food retailer is battling underperforming South African and Australian fashion businesses. 

PSG Wealth is not the only investment company that is optimistic over Mr Price’s potential, with FNB Wealth and Investments also backing the retailer.

FNB Wealth and Investments noted that Shein and Temu fatigue in South Africa should be a boost for Mr Price.

Financials