Quick Poll

Mr Price Group Reports Strong Q3 Retail Sales Growth

  • Strong Growth: Mr Price Group reported a 9.9% increase in Q3 retail sales to R13.2 billion, gaining market share.
  • Segment Performance: The Apparel segment led with 11.7% growth, while Home and Telecoms segments also showed positive results.
  • Optimistic Outlook: Despite challenges, CEO Mark Blair is optimistic, focusing on market share gains and addressing supply chain risks.
Mr Price Group

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%.

Market Performance

Market Share Expansion

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.

Segment-wise Growth

Apparel Segment

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.

Home Segment

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.

Telecoms Segment

The Telecoms segment recorded a 9.0% growth in retail sales and increased its market share by 70bps to its highest level on record.

Financial Highlights

Key Figures (in R millions)

MetricQ3 FY2024 vs FY2023
Group Retail Sales Growth9.9%
Comparable Store Sales Growth4.1%
South African Retail Sales9.3% (R12.3bn)
Non-South African Sales18.1% (R964m)
Online Sales Growth2.9% (1.8% of total)
Total Unit Sales Growth5.0% (105.4m units)

Operational Highlights

  • The store footprint expanded with 85 new stores, reaching a total of 2,892 stores.
  • Cash sales, constituting 90.4% of total retail sales, increased by 10.5%, while credit sales increased by 4.6%.
  • Group retail selling price (RSP) inflation was well managed below CPI, with a 4.9% increase.

Outlook

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.

Conclusion

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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