Mr Price rakes in R1.2bn from telecoms

Admire Moyo
By Admire Moyo, ITWeb's news editor.
Johannesburg, 22 Jun 2023

Retailer Mr Price has seen growth in its telecoms segment, and it has completed the implementation of an Oracle merchandise enterprise resource planning (ERP) system after some hiccups.

This was revealed today, when Mr Price released its FY2023 year-end results for the 52 weeks ended 1 April.

According to the retailer, group revenue was up 17% to R32.9 billion, aided by the inclusion of the acquisition of 70% of the Studio 88 Group (S88), effective 4 October 2022, which brought the total number of stores in the group to 2 702.

In the telecoms segment (3.3% contribution to retail sales), revenue increased 4.5% to R1.2 billion, says Mr Price.

Its instore cellular merchandise presence increased to a total of 465 stores and the 12 standalone stores continue to perform strongly, it notes.

Over 800 000 cellular handsets and accessories were sold during the year, resulting in market share gains of 70 basis points, according to Growth for Knowledge, the retailer adds.

Mr Price points out the completion of the Oracle ERP system was a significant milestone for the group, de-risking its legacy, home-grown IT environment and building a firm platform for its growth ambitions.

“As noted in prior SENS announcements, post-go-live stabilisation challenges were encountered, which are typical in such large company-wide installations, and resulted in disruption and significant distraction to merchant activities.”

It says an internal diagnostic performed by management revealed the system cutover impacted the group’s competitive advantage of in-season trade, and the execution of key sales, stock and margin management planning activities over the year.

The project was successfully closed on 15 March.

Total store sales, which contribute 97.5% to retail sales, increased 18.5% (excluding S88: 2.2%). Online sales increased 3.2% (excluding S88: 1.8%), off a strong growth of 48.2% in the prior period, says the retailer.