Cashbuild raises concern over effects of inflation on product pricing

‘Unemployment and rising inflation are major concerns,’ says FD.
Image: Moneyweb

JSE-listed construction retailer, Cashbuild, reported a 10% drop in revenue in its third fiscal quarter. Around a third of the decline was attributed to the looting of 36 stores during the unrest last year. Excluding the effects of the riots, revenue would have been down 7%.

Listen/ read: Cashbuild staggers under impacts of looting and KZN floods

According to Cashbuild’s financial director, Etienne Prowse, rising product inflation of 8.1% has made many products less affordable for its core lower-end customers.

“We have to get into different living standards measure (LSM) segments. We have been aiming for between level four and six.”

Prowse says its steel products saw a 20% increase in price, which drastically reduced sales.

Cashbuild introduced a national ecommerce offering last year, but its contribution to group sales was insignificant.

Till transactions declined by 17%.  Sales at existing stores dropped by 19%, while new stores saw an increase of 2%.

In the second quarter of last year, Cashbuild’s third fiscal quarter, sales rose by 21% due to people renovating their homes during the Covid-19 lockdown regulations.

Cashbuild opened two new stores during the third quarter bringing the total number of stores to 317. Five of the looted stores are currently being rebuilt for reopening.

Nondumiso Lehutso is a Moneyweb intern

COMMENTS   0

You must be signed in and an Insider Gold subscriber to comment.

SUBSCRIBE NOW SIGN IN

LATEST CURRENCIES  

USD / ZAR
GBP / ZAR
EUR / ZAR
BTC / USD

Podcasts

Instrument Details  

You do not have any portfolios, please create one here.
You do not have an alert portfolio, please create one here.
INSIDER SUBSCRIPTION APP VIDEOS RADIO / LISTEN LIVE SHOP OFFERS WEBINARS NEWSLETTERS TRENDING

Follow us:

Search Articles:
Click a Company: