Mr Price Group, South Africa’s biggest listed value fashion retailer, has raised concerns that the rapid rise of online gambling is competing with retailers for consumer spending, even as household incomes begin to recover.Reporting annual results on Friday, Mr Price indicated there are signs that consumers have more money available after lower inflation, interest rate cuts and improving disposable incomes, but it has not translated into a meaningful boost for discretionary retail spending.CEO Mark Blair said consumers are facing competing demands for their money.“Though a lot is trending in the right direction, some really strong green shoots that we are very thankful for, discretionary retail hasn’t been an immediate beneficiary of that improved environment,” Blair said. He added there are “obviously things competing for consumers’ wallets”, including the growing impact of online gambling.The comments come as concern mounts over the scale of betting activity in South Africa. According to the South African Bookmakers Association, illegal offshore gambling operators account for about 62% of the country’s online gambling market, with more than R50bn in gross gambling revenue flowing offshore each year, Business Day previously reported.Research by Trade Intelligence has also found that many consumers are using money that would otherwise have been spent on groceries, food and household essentials to fund online betting.Mr Price is not alone in raising the issue. Restaurant group Famous Brands also warned last year that online gambling is eating into disposable income and affecting consumer spending patterns.Against that backdrop, Mr Price still managed to grow revenue by 4.2% to R42.7bn during the financial year to end-March while retail sales increased 4.3% to R41.1bn. Operating profit rose 4.3% to just more than R6bn for the first time. Normalised operating profit increased 8%. The retailer opened 196 stores during the year and expanded its footprint to 3,182 stores across 15 trading chains.Blair said the group’s value-focused model helped it navigate a difficult retail environment.While Mr Price delivered stronger profits it cautioned that consumers remain under pressure.The retailer said the escalation of the US-Iran conflict earlier this year pushed up oil prices and fuel costs, creating fresh inflation risks and weighing on consumer confidence. April trading after year-end was described as challenging though trading improved in May and early June.Blair said the company is entering the new financial year cautiously.“The conflict in Iran has brought uncertainty to the short term and we are focused on ensuring that we manage the impacts and continue to deliver value to our loyal customers,” he said.Beyond South Africa, Mr Price confirmed that it has completed its acquisition of European retailer NKD after year-end and said its immediate priorities are growing the South African business and delivering on plans for the German-based retailer. The group indicated that potential expansion into a third international market will take a back seat for the next few years.At home, the retailer is betting on its value offering, store expansion, customer data and loyalty initiatives to drive growth as it navigates a consumer market facing pressure from rising living costs, higher fuel prices and growing competition for household spending.The company’s shares closed up 14.67% at R172 on the JSE on Friday, making the gain the biggest since March 24 2020. On that day it rose 15.43%.