Fashion retailer TFG has reported an 8.3% increase in sales after the recent implementation of the two-pot retirement savings system and the formation of the government of national unity (GNU).
TFG CEO Anthony Thunström told Business Day on Friday that these economic changes have boosted consumer confidence and spending power.
The two-pot retirement system was implemented in September through the Revenue Laws Amendment Bill signed into law by President Cyril Ramaphosa.
Since the law’s enactment, the SA Revenue Service (Sars) has reported that over R21.4bn has been withdrawn from retirement funds, with more than 1-million withdrawal applications approved.
According to Thunström, TFG’s sales data for the five weeks from September to November indicates that consumer spending has been positively affected by the policy, as well as by improvements in other economic indicators, including a drop in inflation and interest rates.
“The outlook is positively buoyed by the formation of the GNU, suspension of load-shedding, and establishment of the two-pot retirement system,” he said.
Credit sales also saw a 1.7% year-on-year increase in the first half of the 2025 financial year, contributing 26.8% to total sales in TFG Africa. The group’s debtors’ book grew by 6.0% to R8.3bn.
Overall, TFG has reported a 2% drop in sales for the first half of its 2025 financial year, as inflationary pressures affected markets across the group’s network.
However, it boosted gross margins and posted record gross profit.
According to TFG’s interim results for the six months to end-September, group revenue dipped by 1.4% to R28bn, with sales down by 0.1% in Africa, which accounts for nearly 70% of the group’s total sales, 8.2% in the UK, and 2.4% in Australia.
The group attributed the decline to weaker consumer demand, inventory delays and inflationary pressures.
It was partially offset by a 9.9% increase in online sales, which now make up 10.7% of total group sales. TGF said online sales on the Bash platform soared by 47.9% in this period.
Gross profit increased by 2.5% to reach R12.8bn, due to a 220 basis point (to 49.5%) improvement in gross margins across all territories, the group said.
Basic earnings per share decreased by 4.8% to 368.3c, while headline earnings per share dropped 5.6% to 371.6c.
The group said it remained optimistic, thanks to the formation of the GNU, improved electricity supply and implementation of the two-pot system.
In the UK and Australia, economic challenges remained, but TFG expected gradual improvements as inflation lessened in the UK and economic conditions stabilised in the latter.
Update: November 10 2024
This story has been updated with new information.
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