Mr Price is unfazed by intense competition from Chinese e-commerce powerhouses Shein and Temu after reporting record operating profit in the 2024 financial year.
On Thursday, the company reported a record-breaking financial year to end-March, with operating profit exceeding R5bn for the first time. Despite an overall sales increase, Mr Price experienced a slight 2.2% dip in online sales. However, this decline has not dampened the company’s outlook.
CEO Mark Blair expressed confidence in the brand’s ability to retain its customer base and market share amid the growing influence of foreign e-commerce competitors.
Blair highlighted the company’s expansion strategy as a significant factor in its success. The aggressive physical expansion had bolstered the retailer’s presence across SA, catering to a customer base that evidently prefers the in-store shopping experience, he said.
Blair acknowledged the impact of international e-commerce players but remained optimistic about Mr Price’s unique position in the market.
“It is undeniable; we cannot say the foreign e-commerce players have not had an impact on the market,” Blair said.
But many of Mr Price’s customers used the online platform primarily for research, preferring to make their purchases in-store. “They have told us over the past 12 years that they want to search online, occasionally shop online, and come into the store to buy.”
While Blair conceded that the pricing strategies of e-commerce competitors presented a challenge, he expressed confidence in Mr Price’s ability to navigate these obstacles.
“Even from a value perspective, where all the challenges relate to e-commerce, customers are still willing to overlook some of those because of the very aggressive pricing they get from e-commerce players,” he said.
The group reported higher annual profit despite losing about 65,000 trading hours, or about R226m in revenue, due to load-shedding. Profit increased 6.1% to R3.4bn as revenue jumped 15.5% to R37.9bn, it said in a statement on Thursday.
Headline earnings per share of 1,286.2c were up 6.7%. A final dividend of 526.8c per share was declared, up 17.8%.
Blair said most of the effects of load-shedding were felt in the first half, as the group reached 100% backup power by the end of the first quarter.
Global and domestic supply chain disruptions caused challenges to optimal inventory management. This was against the backdrop of a weak consumer environment as elevated inflation levels continued to affect low- to middle-income households — the group’s core customer base — the most.
Despite these challenges, retail sales grew 16.2% to R36.6bn and comparable store sales 1.8%. It opened 238 new stores across the group, taking the total to 2,900.
Total store sales increased 16.6% — including the acquired Studio 88 Group — contributing 97.9% to retail sales and online sales decreased 2.2%.
Through acquisitions and investment into new space, the group has more than doubled its store footprint over the past five years.
Credit sales grew 1.7%, while cash sales, which constitute 88.9% of group retail sales, increased 18.3%.
Mr Price expects capital expenditure for 2025 to be about R1bn and it plans to open 200 new stores.
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