Durban-based retail giant Mr Price Group Limited has released its trading update for the 13 weeks ended December 30, 2023, revealing robust growth in retail sales during the third quarter of the financial year ending March 30, 2024. The company reported a 9.9% increase in retail sales to R13.2 billion, with comparable store sales up by 4.1%.
Mr Price Group demonstrated its resilience in a challenging market, gaining 130 basis points (bps) in market share over the quarter, with an impressive 180bps gain in December alone. The group’s strategic efforts in navigating disruptions, including an ERP system change and loadshedding back-up power facilities installation, were reflected in the improved trading performance.
The Apparel segment led the group’s growth, with retail sales surging by 11.7%. Mr Price Apparel, the flagship division, reported strong double-digit sales growth, gaining 150bps of market share. The performance in kids’ merchandise stood out, indicating promising prospects for the new Mr Price Kids concept, which has already expanded to 30 stores.
The Home segment showed monthly improvement throughout the quarter, with Mr Price Home and Sheet Street achieving mid-single digit sales growth levels in December.
The Telecoms segment recorded a 9.0% growth in retail sales and increased its market share by 70bps to its highest level on record.
| Metric | Q3 FY2024 vs FY2023 |
|---|---|
| Group Retail Sales Growth | 9.9% |
| Comparable Store Sales Growth | 4.1% |
| South African Retail Sales | 9.3% (R12.3bn) |
| Non-South African Sales | 18.1% (R964m) |
| Online Sales Growth | 2.9% (1.8% of total) |
| Total Unit Sales Growth | 5.0% (105.4m units) |
While the South African GDP growth outlook for 2024 is expected to be constrained, Mr Price Group remains cautiously optimistic. The first half of the year is anticipated to be challenging for consumers, with potential improvements in the second half if inflation moderates and interest rates retract.
The company aims to reflect negative stock growth at its March year-end, contingent on overcoming supply chain challenges. The Durban port congestion and the Red Sea shipping route’s instability pose risks, but the company is committed to taking necessary actions to mitigate their impact on trade.
Despite a slow start in October, Mr Price Group showcased resilience and adaptability, reporting strong growth in retail sales and gaining market share. The group’s focus on delivering profitable market share gains, coupled with its strategic acquisitions and diverse segment performances, positions it well for continued success in a dynamic market.
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