Mr Price's recent acquisition of NKD in Europe was reflected in its financial results for the first time, contributing to a 45% increase in retail in the first quarter to June 30.
Image: Ian Landsberg/Independent Newspapers.
Mr Price Group’s recent European acquisition has begun to impact the top line, as group retail sales increased a staggering 45,3% to R3,1 billion in the 13 weeks to June 27.
The value clothing and homeware retail group said in a trading statement Thursday the increase in retail sales for the first quarter of its financial year followed the inclusion of NKD Group, the value apparel and homeware retailer headquartered in Germany, effective March 31, 2026.
Excluding NKD, retail sales in Africa increased 3,2% to R9,3bn, which nonetheless exceeded national average retail sales growth as measured by the Retailers' Liaison Committee (RLC) of 0,8%.
Mr Price’s directors said the competitor environment was promotional during the period and intensified in June. However, their plan to grow sales ahead of the market, but not at the expense of gross margin, was achieved, with African gross margin expanding by 40 basis points.
The group reported in its 2026 annual results that post-year end trade was challenging in April with some improvement into May.
Africa saw retail sales growth of 2.7% in these two months combined, against growth in the base of 11.6%. Trade in June was against a weaker base of -5.1% (prior year school holiday shift from June to July), and Africa delivered 4.3% retail sales growth, ahead of the RLC's 2.6% decline.
“The retail operating environment in both African and European markets remained unpredictable. Prolonged geopolitical uncertainty from the US-Iran conflict weighed on consumer confidence, which remained negative and contributed to cautious consumer spending,” the directors said.
Inflation rose across both markets, reaching two-year highs in the two key countries of South Africa and Germany. Higher interest rates also impacted consumers' disposable income and willingness to spend on discretionary categories.
“Economic conditions continue to reinforce the resilience of the value retail sector. The group remains confident its portfolio of 16 trading chains is well positioned to outperform in its respective markets,” directors said.
Total retail sales grew 3,2% to R9,3bn and comparable store sales were flat. South African retail sales grew 3,5% to R8,6bn while non-South African corporate-owned store sales decreased 0,3%.
Total store sales increased 3.1% in Africa while online sales increased 4.7%, contributing 2.4% of total retail sales.
Retail selling price (RSP) inflation of 1,5% was “carefully managed” to protect the customer value proposition in a rising inflation environment. Total unit sales increased 1,7% to 68,7m.
The store footprint increased by 32 stores and the footprint expanded to 3,214 stores. Trading space increased 3,8%.
Credit sales increased 3,8% and the new account approval rate decreased 50bps to 22,8% as the group continues to cautiously manage its credit granting in a constrained consumer environment.
Retail sales in the Apparel segment grew 3,4% compared to the RLC's flat performance.
Comparable store sales increased 0,6% and unit sales increased 1,9%. All divisions in the Apparel segment grew against double-digit base effects in the months of April and May, and sales growth improved in June, albeit against a weak base.
The Homeware segment increased retail sales by 0,7% compared with the RLC's growth of 5,8%. Comparable store sales decreased 3,3% and unit sales increased 0,2%. Mr Price Home and Sheet Street, which focus on value-seeking customers, competed in a highly promotional competitor environment.
Despite this, their focus on profitable sales growth enabled the chains to maintain their GP margins. Yuppiechef, which targets a higher-income customer base, delivered double-digit sales growth against a double-digit base, and improved their GP margin.
The Telecoms segment increased retail sales by 11,2% against a double-digit base.
In Europe, retail sales (100% cash sales) in Europe totalled R3,8bn. NKD outperformed both the apparel market and the value segment in Germany, which accounts for about 60% of its sales.
A space optimisation programme saw 21 stores closed, and 23 opened, increasing the total footprint to 2,156 stores.
Mr Price directors said the global macroeconomic environment remains uncertain as geopolitical tensions continue to fluctuate with low expectations of a near-term resolution. Trading conditions were expected to remain challenging and unpredictable over the balance of the financial year.
BUSINESS REPORT