Mr Price keeping the taps closed

 ·22 Jan 2025

Mr Price has seen strong sales growth, but the group is still cautious about extending credit to consumers.

In a trading update for the third quarter of its 2025 financial year, 29 September 2024 to 28 December 2024, Mr Price saw retail sales growth of 10.6% to R14.6 billion.

South African retail sales grew 10.8% to R13.6 billion, while non-South African corporate-owned store sales increased by 7.7% to R1 billion.

Total store sales jumped by 10.6%, while online sales increased by 10.5%. Online sales also contributed 1.8% of total retail sales during the third quarter.

The group also opened its 3000th store during the quarter after it opened a total of 78 new stores. This expanded the group’s footprint to 3,031 by the end of the period.

The group also noted that cash sales grew by 11.1%, increasing its total contribution to retail sales to 90.9%.

Credit sales also increased 5.7% despite the group’s account approval framework being implemented cautiously.

This was against a backdrop of consumer credit applications reaching an all-time high in Q3 2024, while rejection rates stayed high, data from the National Credit Regulator shows.

Retail sales in the apparel segment grew by 10.9% during the quarter, gaining a market share of 80 basis points.

Studio 88, which the group recently acquired, increased retail sales by double digits.

The Homeware segment’s retail sales growth of 7.9% continued to show momentum, achieving its highest quarterly sales of the financial year thus far.

Yuppiechef saw double-digit sales growth and reached its highest December market share level to date.

The Telecoms segment also continued its high growth performance, with retail sales up 16.5%, driven by strong performances over Black Friday and December.

Q3 FY2025 vs FY2024Retail sales growthContribution to retail sales
Apparel segment10.9%83.4%
Homeware segment7.9%13.9%
Telecoms segment16.5%2.7%
Group10.6%100%
Source: Mr Price’s trading update for Q3 FY2025

Outlook

Looking ahead to 2025, Mr Price said that the economic outlook for South Africa is expected to improve compared to 2024.

“A steadily improving consumer environment, aided by decreasing inflation and lower interest rates, continues to build a solid platform for growth in comparison to recent years,” said the group.

However, it noted several risk events that “could dampen growth forecasts globally”.

This includes the uncertain international political and economic landscapes that could impact inflation and interest rate expectations.

The positive impact of the Government of National Unity (GNU) and its ability to continue building on its initial success will also need to be closely monitored, it said.

Despite these external factors, the group’s management remains optimistic about the year ahead.

“The group’s strong merchandise execution, which offers its customers differentiated fashion-value, and its EDLP pricing model makes it well positioned to continue its profitable market share gains.”

The first three weeks of January were positive for the group, which saw double-digit retail sales growth and gross profit margin gains across each trading segment.

The group said it is now focused on continuing its strong execution for Q4.

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