By Ntando Thukwana , Business Insider SA
South African consumers hunkered down at home during the pandemic gave a nice boost in sales for Mr Price Home and Massmart’s Builders Warehouse, as many upgraded their immediate surroundings.
In January, retailers Massmart and Mr Price released their trading updates, and both reported a significant rise in their home-improvement segments. Mr Price said sales for its home segment soared 10.6% in the third quarter to the end of December and said demand for home products remained strong throughout the period.
“Customer demand for household merchandise remains high as many employers encourage work from home practices. The group anticipates the home trend to continue to grow strongly,” the company said.
Sales for Mr Price Home were up 11.1% and 9.4% for Sheet Street. The retailer said it grew market share in November and increased total retail sales by 5.8% to R7.5 billion during the reporting quarter. Walmart-owned Massmart said it felt the impacts of the pandemic as foot traffic dwindled and said total sales decreased 7.7% to R86.5 billion in the year to 27 December.
Although overall sales for Massmart took a hit, the retailer, which offers home improvement and DIY products under Builders Warehouse, said sales for these categories were strong, and more so in December.
Casparus Treurnicht, portfolio manager at Gryphon Asset Management said most consumers had shifted their spending to home upgrades because they were spending less on other things, such as holidays. Treurnicht said the sales boom seen by retailers of home improvement goods was a one-time blip and that it would not sustain for long.
“The first time when people experienced this work from home, you felt inclined to do these upgrades, but you’re not going to break down another wall. The upgrades get less,” he said.
Record low interest rates also helped boost disposable income which may have come in handy for home projects he said.