Mr Price online sales surge 90%
Fashion retailer Mr Price Group’s online sales jumped 90% in seven weeks from the beginning of April to 20 June, with spending partially recovering after COVID-19 shut down businesses, compressed the economy and immobilised consumers.
The company suffered major losses during the lockdown, experiencing a decline in cash reserves of approximately R2 billion during the five-week lockdown period, and now sees an opportunity through online sales.
Mr Price provided a market update today and also released financial results for the 52 weeks ended 28 March, saying it is assessing whether the online sales jump is a permanent step change in consumer behaviour.
Mr Price’s surge in online sales comes as analysts say the COVID-19 lockdown has catapulted e-commerce transactions in SA, as more people opt for online shopping than physically visiting shops.
A recent report by research firm Nielsen on the impact of the lockdown on consumer behaviour in the country recorded growth of people shopping online, with 37% of respondents saying they are shopping more online.
In its market update, Mr Price notes: “Online sales grew strongly and were up 90.1% over the period. Mr Price Apparel and Mr Price Sport sales growth exceeded 100%. It is still to be seen whether this is a permanent step change in consumer behaviour.
“The group's historic and ongoing investment into its omni-channel offering has positioned it to take advantage of this trend.”
In addition to the changing online consumer behaviour, Mr Price says a shift in store location has been notable.
“Super regional centres lagged smaller formats due to reduced trading hours and customers preferring to shop at more convenient locations.
“The combination of strong online sales and store locations which support customers’ needs positions the group well as a leading omni-channel retailer in this changing landscape.”
However, Mr Price cautioned that the current and forecast spread of the virus in SA remains a concern given “its impact on society due to loss of life and the devastating financial impact on businesses and citizens”.
The group lamented the impact of COVID-19 on its operations, saying it is not possible at this stage to quantify the economic effect on the group, “but ongoing operational disruptions and future uncertainty remain significant challenges. The group anticipates an extremely constrained consumer environment.”