Clothing retailer Truworths felt the pain of port congestion and declining consumer spending in South Africa in the second half of 2023, particularly during the festive season.
In a voluntary trading update for the 26 weeks to the end of December 2023, Truworths revealed that its sales in South Africa decreased by 0.3% to R8.4 billion.
Truworths owns prominent retail fashion brands, including its namesake, Daniel Hechter, Identity, and Office London.
In the last nine weeks of the year, from 30 October to 31 December, sales decreased by 1.6% to R4 billion compared to the same period in 2022.
The company bemoaned congestion at South Africa’s ports, which resulted in lower-than-expected merchandise deliveries for the festive season.
Declining consumer confidence and deteriorating credit health of South Africans also hit Truworths’ business.
More concerning was the company’s like-for-like sales, which declined by 3.3%. This figure strips out the growth that comes from opening new stores. It compares the performance of stores the company has kept throughout the year.
On a more positive note, the company’s UK-based business, Office, showed strong growth of 15.6% in pound terms and 33.1% in rand terms.
This strong performance improved Truworths’ total retail sales across the group by 8.2% in the period. The company estimates its earnings per share to increase between 1% and 5% for the period.
Truworths’ poor festive season performance indicates that it is losing ground to its South African competitors – Mr Price and The Foschini Group.
In December, both grew their sales by over 10% and took market share according to their metrics.
Their better performance may reflect better supply chain resilience and increased local production as Mr Price and Foschini largely avoided the impact of South Africa’s port congestion.