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Value clothing retailer Mr Price is preparing for renewed pressure on costs and consumers as geopolitical tensions, oil price volatility and global supply chain disruptions threaten to weigh on the retail environment.In its latest annual report, the retailer has identified geopolitical tensions, supply chain disruptions and a challenging consumer environment as top risks facing the business as it enters the next phase of growth.The group said the escalation of global conflicts has increased pressure on shipping costs, fuel prices and inflation, creating uncertainty for retailers dependent on international sourcing.Mr Price said it continues to monitor global developments, particularly risks linked to freight costs and supply chain stability, while protecting its value positioning for consumers. (Karen Moolman) The retailer’s products cover clothing, homeware, sports goods, financial services and telecom, with products sourced locally and abroad through supplier networks.It said that supply chain resilience remains a priority as external shocks continue to affect global trade patterns.The group said it has engaged with shipping partners to manage rising fuel-related input costs and secure competitive freight rates through long-term arrangements.Mr Price said it has also used its procurement scale and supply chain flexibility to manage pricing pressure.The retailer reported that there had been no supply chain disruption, with on-time and in-full deliveries maintained during the early stages of increased global uncertainty.The company’s supply chain model supports thousands of stores and online channels, with its operations dependent on efficient movement of merchandise from suppliers into distribution networks and stores.The retailer’s risk outlook comes as South African consumers continue to face affordability pressure.Mr Price said while economic conditions show signs of improvement, households have not fully recovered, with constrained disposable income continuing to influence shopping decisions.The company said consumers remain focused on value, requiring retailers to balance pricing, availability and profitability.“Other than increased outbound transport costs, to date the group has been largely unaffected; however, the same cannot be said for consumers. The expected continued rise in fuel costs and inflation, coupled with further interest rate hikes, will place increased pressure on consumers,” said CEO Mark Blair. The group said its strategy remains focused on maintaining affordability while managing external cost pressures.The retailer also said international events could have broader consequences for businesses and consumers if higher oil prices translate into increased inflation.The report notes that elevated oil costs could increase business input costs and place further pressure on consumers if global instability continues.Mr Price said it has factored geopolitical risks into its planning processes while continuing to invest in growth.The group ended the year operating thousands of stores across its brands, with apparel, homeware, sportswear and other categories forming part of its broader retail offering.The retailer said its focus will remain on protecting customer value while navigating a more uncertain global environment.“We have adopted a more cautious sales outlook in the FY2027 budget, reflecting the anticipated impact on discretionary spend. If the conflict is short-lived, the economic damage globally can be contained, and consumers will receive much-needed relief. As we have proved before, our operational agility will enable us to increase inventory inputs to capitalise on any economic and consumer improvement.”
