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Mr Price Shows Strong Sales Growth but Cautious on Extending Consumer Credit

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Mr Price continues to outperform in the South African retail sector, showing robust sales growth, particularly in apparel, homeware, and telecoms, while exercising caution with its credit extension policies.

In its trading update for the third quarter of the 2025 financial year (29 September to 28 December 2024), Mr Price reported a solid 10.6% growth in total retail sales, reaching R14.6 billion. This strong performance comes despite the challenging economic conditions and a deliberate focus on limiting consumer credit exposure.

Retail Performance Breakdown

The group’s South African retail sales surged by 10.8%, reaching R13.6 billion, with online sales growing by 10.5%. The shift towards digital shopping continues to be a driving force for Mr Price, contributing 1.8% of total retail sales during the third quarter.

International operations also saw positive growth, with non-South African corporate-owned store sales rising 7.7% to R1 billion. Overall, the group’s retail sales were bolstered by several key segments, with the apparel sector performing particularly well.

  • Apparel: Retail sales in the apparel segment grew by 10.9%, solidifying its dominant market position.
  • Homeware: The homeware segment also showed strong momentum, posting a 7.9% growth in sales.
  • Telecoms: Mr Price’s telecoms business saw impressive 16.5% growth, thanks to strong performances during Black Friday and the December festive season.

Despite the growth across various sectors, Mr Price remained cautious about extending consumer credit, opting for a more conservative approach. Credit sales increased by 5.7%, but the company emphasized that its account approval framework remains cautious, a strategy in line with high credit rejection rates seen across the industry.

Cautious Approach to Consumer Credit

The National Credit Regulator’s data showed that consumer credit applications reached an all-time high in Q3 2024, with rejection rates remaining elevated. This backdrop led Mr Price to carefully manage its credit approvals, ensuring that its credit risk remains under control.

Cash sales continued to drive the business, growing by 11.1% and contributing 90.9% to total retail sales. The group’s ability to manage cash-based sales and avoid over-reliance on credit has allowed it to maintain healthy revenue growth despite challenges in the consumer credit landscape.

Optimism Despite External Risks

Looking ahead, Mr Price is cautiously optimistic about the economic recovery in South Africa, noting that decreasing inflation and lower interest rates provide a solid foundation for growth in 2025. However, the group also flagged several global risks, including potential political and economic instability, which could dampen growth projections.

Despite external challenges, the group’s management remains confident in its strategy, focusing on strong merchandise execution and the Everyday Low Price (EDLP) pricing model. These strategies, combined with a clear focus on maintaining profitable market share gains, position Mr Price well for continued growth.

Focus on Execution in Q4

As Mr Price enters the final quarter of its 2025 financial year, the group remains committed to maintaining its strong execution. Early signs from January indicate continued strong sales, and Mr Price is determined to finish the year on a high note.

With its cautious yet strategic approach to consumer credit and a continued focus on digital expansion and in-store performance, Mr Price is well-placed to navigate the challenges ahead while delivering growth for its stakeholders.

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