Business

Mr Price sounds the alarm

Luke Fraser

 ·20 Nov 2025

Mr Price has seen a rise in its revenue and earnings, but has warned that the South African consumer remains under extreme pressure. 

For the 26 weeks ended 27 September 2025, Mr Price saw its total revenue increase by 5.4% to R18.6 billion. 

The group’s retail sales growth of 5.5% was higher than the comparable market’s sales growth of 5.3%. 

The group’s basic earnings per share of 512.8 cents and 513.0 cents were up 6.5%.

Although the results reflected the group’s ability to deliver positive earnings growth in H1, the sales performance is reflective of a consumer environment that remains constrained. 

The group said that the prolonged period of negative real wage growth from 2022 to 2023 has had a lasting impact. 

This has compromised household disposable income, resulting in weak levels of consumer expenditure. 

The group added that the short-term relief via lower interest rates and inflation has not been sufficient to offset these effects, resulting in limited discretionary spending capacity.

It said that continued negative consumer confidence emphasises this challenging environment. 

“I am pleased that we have once again executed our strategic intent of maximising sales growth at improved margins,” said Group CEO Mark Blair. 

“Our value-focused business model enabled us to effectively manage overheads and ensure that we consistently deliver positive earnings growth and returns to shareholders.” 

The group declared an interim dividend of 323.2 cents per share for the period, representing a 6.5% increase and marking a payout ratio of 63%. 

The group also opened 91 new stores during the period, growing its total store base to 3,100 stores and increasing weighted average trading space by 3.5%. 

New stores across the group’s portfolio also showed strong returns, while cash sales also increased 5.6% and constituted 88.2% of retail sales. 

Credit sales growth stood at 4.3%, driven primarily by existing account holders, and the group approved 22.6% of new account applications.

The latest Transaction Consumer Credit Index has signalled a modest improvement in household credit health, but the group said that the strict affordability criteria remain appropriate. 

Outlook

Looking ahead, the group stated that the consumer environment is fragile in the short term, remaining hopeful of improvement in 2026, supported by a lower inflationary and interest rate environment.

Volatility in spending patterns is likely to persist as the monthly window for consumer spending is limited by constrained disposable income levels. 

Increasing food inflation and divergence in discretionary spending will likely place an additional strain on household budgets.

That said, the group noted that consumers have become increasingly value-seeking, with its diversified portfolio of brands remaining well-positioned in their customary market segments. 

Notably, it stated that improvements in the operational capacity of the Durban port have positively impacted stock-out and inventory management ahead of the key trading months.

Retail sales in the first 7 weeks of the second half of the financial year were up 3.3% against a year-over-year base of 12.3%, with momentum improving from October to November.

“I have strong confidence in our team and their ability to continue achieving consistent earnings performances while also delivering for the future,” said Blair.

“We remain focused on execution across the business and providing value to all our stakeholders.”