Business

Major South African retailer is rocking

Mr Price experienced a strong third quarter, having outperformed the market and hitting a milestone of 3,000 stores.

The retailer released a trading update on Wednesday morning for the third quarter from 29 September 2024 to 28 December 2024.

In this update, Mr Price – who also owns brands like Miladys, Sheet Street, Yuppiechef and Studio 88 – reported a strong performance.

The company’s group retail sales increased by 10.6% to R14.6 billion against a firm sales growth base of 9.9%. 

This translates to a two-year compound annual growth rate of 10.3%.

This strong sales growth also saw Mr Price gain market share gains of 60 basis points, supported by comparable store sales growth of 6.3%.

The company also recorded retail selling price inflation of 5.3%, supported by increased full-price sales and fewer markdowns.

In this quarter, the retailer also outperformed the total comparable market’s retail sales growth of 6.4%, gaining market share in each month.

This means Mr Price has now gained market share for six consecutive quarters.

In South Africa, where the retailer predominantly operates, retail sales increased 10.8%, while non-South African sales grew 7.7% to R1 billion.

Online sales rose 10.5%, contributing 1.8% of total sales, with a notable 21.9% growth in December.

Apparel led the way for sales growth in this quarter, growing by 10.9% and contributing 83.4% to total sales.

December was a particularly good month for this segment, with growth accelerating to 13.2%. 

Homeware was the second-largest contributor to total sales and saw growth of 7.9%, achieving the highest quarterly growth of the year. 

Yuppiechef, in particular, was a top performer, recording double-digit growth (18.4% CAGR) and reaching its highest December market share.

The retailer’s telecoms segment recorded retail sales growth of 16.5%, driven by strong Black Friday and December performances.

Mr Price also reported a significant milestone – the retailer opened its 3,000th store, ending the quarter with 3,031 stores after adding 78 new locations. 

This saw the retailer’s trading space increase by 4.9% on a weighted average basis.

Looking ahead, Mr Price said 2025 is set to be another strong year for the group, with South Africa’s economic growth prospects expected to improve.

“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,” the company said.

However, the retailer also warned that there are several risk events which could dampen growth forecasts globally. 

It pointed to the uncertainty that still looms over the international political and economic landscapes, which could impact inflation and interest rate expectations. 

“Additionally, the positive impact of the Government of National Unity in South Africa and its ability to continue building on its initial success will be closely monitored,” it said.

Despite these external factors, Mr Price said its 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,” it said.

“Performance in the first three weeks of January is encouraging with double-digit retail sales growth and GP margin gains across each of its trading segments.” 

“The group is focused on continuing its strong execution in quarter four with plans being well set for the new financial year.”

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