Mr Price Group reports robust sales growth despite June decline

Mr Price Group detailed a commendable 6.3% increase in retail sales, reaching R9 billion for the 13 weeks ending June 28, even though June presented a more challenging month, the group said in a trading update on Wednesday.

June sales tumbled 5.1%. The group's performance was highlighted by an increase in comparable store sales by 3% over the 13 weekd, showcasing its resilience amidst a fluctuating market landscape.

Despite the slip in sales for June, investors appeared cautious as the share price decreased by 2.63% to R209.34. It traded at R211.21 at the same time last year.

Management remains optimistic about their competitive advantages, noting significant market share gains of 10 basis percentage points during the reporting period—an achievement that far exceeds the total comparable market's retail sales growth, as confirmed by the Retailers' Liaison Committee (RLC).

“The group has gained more than R300 million in market share from competitors over the last twelve months, highlighting the effectiveness of its differentiated fashion-value offering,” management stated, underscoring their strategic advantage in a volatile retail environment.

Interestingly, Mr Price's annual results indicated a strong start to the financial year, with retail sales soaring by 11.6% in the first two months. This surge was positively influenced by the timing of the Easter holidays and robust sales in May, attributed to a late winter season and boosted consumer confidence following the recent election.

Nevertheless, June 2025 saw a decline aligned with broader market trends, where RLC retail sales indicated a downturn. This decline for Mr Price was notable, given a firm sales base of 12.7% from the previous year. The shift of school holidays into July particularly impacted sales, necessitating higher markdown activities in response to increased promotional competition within a challenging sector.

Despite these hurdles, the group exited the winter season with confidence and indicated satisfaction with its closing stock position. South African retail sales remained steady, growing by 6% to R8.3 billion, while the online segment continued to flourish, with a 7.6% increase contributing to 2.4% of total retail sales.

Management highlighted an impressive growth projection, noting that retail sales rose by 12.9% in the first three weeks of July, accompanied by an improved gross profit margin compared to the previous year. Categories such as Mr Price Apparel and Studio 88 achieved strong double-digit growth early in the reporting period, although June faced pressures from strong base effects.

Homeware sales reflected healthy growth at 6.4%, with comparable sales rising 5.3%. Mr Price Home and Sheet Street benefitted from previous momentum, while Yuppiechef celebrated 14 consecutive months of market share gains. The Telecoms segment also marked a significant increase in sales by 12.7%, further diversifying the group's performance.

Looking ahead, the group cautioned against the unpredictable domestic economic landscape that may characterise the latter half of the financial year. While short-term relief from low inflation and interest rates offers some optimism, rising food and fuel prices are anticipated to threaten disposable incomes.

With ambitious annual space growth projected at approximately 4%, Mr Price Group remains committed to maintaining its high return thresholds, despite the challenging conditions that loom.

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