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Mr Price expects challenging Black Friday, online growth

Sibahle Malinga
By Sibahle Malinga, ITWeb senior news journalist.
Johannesburg, 27 Nov 2020

Mr Price Group says it achieved stronger business performance than originally anticipated, with online sales jumping 71.5% from May, accounting for 2.5% of overall sales.

While the fashion retail group says it is expecting a challenging Black Friday week compared to last year, due partly to COVID-19 store restrictions which will limit footfall in stores, it does anticipate continued high online growth as more customers switch to its online channels.

In its latest unaudited interim results for the 26 weeks ended 26 September, the company says its sales grew by double digits in the first six weeks of the second half of 2020. However, due to less frequent visits to physical stores, consumer transactions have declined, although basket spend per transaction has increased by double-digit levels.

Total revenue from continuing operations (discontinued operations in Nigeria) decreased 14.4% to R9.2 billion, with retail sales declining 14.8% to R8.6 billion.

Despite this, the group grew market share by 100 basis points over the period, and excluding April, retail sales grew 3.2% (SA up 3.7%).

In its market update, Mr Price notes: “Online sales grew 71.5% and accounts for 2.5% of the group's sales. Web site traffic (Web and app) increased 78.6%, with the group holding the second highest share of traffic among its omnichannel competitors, according to Similarweb.”

Further to this, the mobile unit is an increasingly important online channel for the company and accounts for 65.7% of the group's online turnover. The group's mobile traffic grew 97.5% and received a new apparel order every 51 seconds, highlighting the importance of the group's continued investment into its digital capabilities.

The group points out this is a significant achievement considering it only has six online brands: Mr Price, Miladys, Mr Price Sport, Mr Price Home, Sheet Street andMr Price Money.

Mr Price has been experiencing a surge in online sales since June, when e-commerce sales jumped 90% between April to 20 June, with spending partially recovered after COVID-19 shut down businesses, compressed the economy and immobilised consumers.

Despite this, the group says it is treading cautiously amid the continuing economic challenges posed by the COVID-19 crisis, which have resulted in decreased consumer buying power.

“The group continues to cautiously manage the ongoing challenges relating to COVID-19. The threat of the pandemic is by no means over and uncertainty regarding stricter lockdown levels remains. The group will continue to respond with agility to the trading environment, while remaining vigilant of its associates' and customers' safety,” it says.

The group also announced it has acquired family-owned fashion retailer Power Fashion, which has over 170 stores across Southern Africa.

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