Pepkor, the owner of retail brands such as Pep and Ackermans, has flagged a number of risks in the coming months which could impact consumer finances.
Presenting its six-month financial results on Friday (27 May), the group noted that its operating environment remains challenging as unemployment levels and the cost of living continue to increase.
“The extension of the monthly R350 Covid-19 Social Relief of Distress (SRD) grant to March 2023, as announced in the recent State of the Nation Address (SONA) by the President, will provide much-needed relief for many consumers in South Africa who need to survive on a small budget.”
On a positive note, the increased momentum in events and industries such as tourism is encouraging and should alleviate some of the pressure consumers face, it said.
“Higher levels of price inflation are expected for the next summer season starting in August 2022. While challenging, this operating environment motivates operations teams to develop innovative new ways to ensure that products remain affordable for consumers – thereby redefining and solidifying the group’s position in the South African discount and value sectors.”
The group added that supply chain disruption and uncertainty have continued. “The group’s merchandise teams have done exceptionally well to mitigate the impact of disruption on merchandise inflows and in-store availability. While global supply chain uncertainties persist, it seems that shipping costs have stabilised and may trend downwards.”
“Strong trading is expected during the second half of the year, supported by the lower base in the comparable period, which was affected by the civil unrest.”
The group said it was still on track to open 300 more stores in the 2022 financial year. Other key financial results show:
- 3.3% growth in revenue to R42 billion;
- 189 basis points market share expansion across product categories;
- 19.1% growth in operating profit[2] to R5.7 billion;
- 28.3% increase in…