While South African JSE clothing retailers for the third quarter of 2023 released positive trading statements and announced increases in their sales, they also highlighted load shedding and high inflation as challenges they are facing.
Business Report looked at business updates for The Foschini Group, Mr Price, Woolworths, and Truworths to see how these retailers have fared in the period.
In its business update for the third quarter of 2023, released on Monday, The Foschini Group (TFG) said it had achieved a robust performance off a strong base, with group retail turnover growth of 17.3% compared to the third quarter of the 2022 financial year, and growth of 20.8% for the nine months ended December 31, 2022.
Meanwhile, the results of retailer Truworths International released on November 3, 2022 for the same period showed that the group retail sales for the first 17 weeks (from July 4, 2022 to October 30, 2022) of the 2023 financial period increased by 15.5% to R5.9 billion, compared to the first 17 weeks from June 28, 2021 to October 24, 2021 of the 2022 financial period. It said retail sales for the current period increased 13.1%.
Mr Price said in its update released on January 20, 2023 during the third quarter from October 2, 2022 to December 31, 2022 of the financial year ending April 1, 2023 the group had recorded growth in retail sales and other income of 34% to R12.4bn.
Meanwhile, in its latest trading update released on January 19, 2023 Woolworths said the group’s turnover and concession sales for the 26 weeks ended December 25, 2022 increased by 18.5% compared to the 26 weeks ended December 26, 2021 and by 16.3% in constant currency terms.
Challenges faced
Retailers also stated their challenges during the period, including load shedding and rising inflation.
TFG Africa said it lost about 112 000 trading hours during the quarter of the 2023 financial year and 260 000 trading hours during the first nine months of the 2023 financial year, due to continued load shedding in the country.
Mr Price said rising inflation and interest rates as well as negative real wage growth had resulted in continued financial constraints for consumers.
This as it continued to incur a significant increase in diesel costs to enable trade during the extended power outages.
Woolworths also said there had been a considerable disruption caused by load shedding, which had a pronounced impact on its fresh business in terms of foregone sales and increased waste.
OUTLOOK
Looking ahead, Truworths said the trading environment was expected to remain challenging in the year ahead with low economic growth and ongoing load shedding expected in South Africa, and as consumers contend with escalating fuel, electricity and food prices as well interest rates.
Mr Price said the global growth outlook was likely to remain pedestrian despite inflation across most markets appearing to have peaked.
Anchor Capital equity analyst Zinhle Mayekiso said JSE apparel retailers had recently started releasing their sales updates.
“Woolworths’s (WHL’s) trading statement update (for the 26 weeks ended December 25, 2022) was relatively positive. This was a positive surprise especially given the challenging operating environment locally that it had to endure and increasing headwinds, including power cuts.
“However, Mr Price’s third quarter of 2023 update was not well received by the market as its underlying business portfolio has produced pedestrian sales growth that disappointed investors,” she said
“TFG’s update for the three months to the end of December was relatively positive, although it recorded a somewhat mixed sales performance in its geographic retail portfolio,” Mayekiso said.
BUSINESS REPORT