Fashion retailer Mr Price has reported a record surge in credit applications during the third quarter of the 2024 financial year, reflecting a rebound in consumer confidence as a result of cooling inflation and a cut in interest rates.
The retailer in trading update for the three months to end-December 28 published on Wednesday, said consumer credit applications reached unprecedented levels even as rejection rates remained elevated.
The group said credit sales increased 5.7%, driven by a cautiously implemented account approval framework.
Cash sales grew by 11.1% and accounted for 90.9% of total retail sales. Overall, Mr Price posted double-digit retail sales growth of 10.6% to R14.6bn, with comparable store sales up 6.3%.
“Mr Price Apparel continued to gain market share, increasing 80 bps, marking six consecutive quarters of gains and the division reached an all-time high market share level in December,” it said.
“Performance in the first three weeks of January is encouraging with double digit retail sales growth and gross profit margin gains across each of its trading segments. The group is focused on continuing its strong execution in quarter four with plans being well set for the new financial year.”
The results of the latest FNB/BER consumer confidence index shows the formation of a government of national unity, the end of load-shedding, lower inflation, and two interest rate cuts in 2024.
In the third quarter, Mr Price’s apparel reported a 10.9% increase in retail sales, with Studio 88 and Power Fashion achieving double-digit growth. Homeware sales increased 7.9%, led by Yuppiechef’s record December market share and double-digit growth.
The telecoms segment recorded a 16.5% sales increase, fuelled by Black Friday and festive demand. Online sales rose by 10.5%, contributing 1.8% to total retail sales, with December online sales surging 21.9%.
Mr Price continued its expansion efforts, opening 78 new stores during the third quarter, including its 3,000th store. The group said it anticipated an improving economic environment; however, global economic uncertainties and the performance of SA’s government of national unity could pose risks.
“The 2025 economic growth outlook for SA is anticipated to improve in comparison to 2024. A steadily improving consumer environment, aided by decreasing inflation and lower interest rates, continues to build a solid platform for growth in comparison to recent years,” Mr Price said.
“However, there are several risk events which could dampen growth forecasts globally. The international political and economic landscapes remain uncertain and could impact inflation and interest rate expectations. Additionally, the positive impact of the government of national unity in SA and its ability to continue building on its initial success will be closely monitored.”
“Despite these external factors, management remain optimistic about the year ahead,” Mr Price said.
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