Truworths hit by stock shortages

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Photo: Truworths
Photo: Truworths

In a trading update for the three months to end-September, Truworths has warned that its sales were hit by stock shortages due to the global supply chain crisis.

Its retail sales fell by 1.2% to R3.9 billion in the past quarter, compared to the same quarter last year.

A sharp recovery in demand for products across the world has put strain on the system, with a shortage of shipping containers and warehouse capacity in many countries adding to delays. Meanwhile, there is congestion at ports, and in some Western countries, truck drivers are in short supply.

In China, a major centre of international manufacturing, ports and factories have been closed after surges in new Covid-19 cases.

"Trading conditions in the group’s main markets, South Africa and the UK, continue to be impacted by the Covid-19 pandemic, which together with international supply chain disruptions, have resulted in stock shortages in certain product ranges," Truworths said in a statement.

It added that low stock levels in the past quarter were negative for sales. However, it expects to be in a better position for the holiday season.

"The group is pleased to announce that inventory levels have improved recently and that it is in an improved stock position for the upcoming peak trading season."

Truworths said the civil unrest in July also had a "particularly negative impact" on local sales from mid-July to the end of August. Six of the 57 affected stores remain closed as they were located in fire-damaged shopping centres. Truworths has submitted insurance claims of R69 million.

Prices at its local stores decreased by an average of 2.2% over the past quarter.

Retail sales at its Office chain in the UK increased by 3% in pound terms, but in rand, retail sales for Office decreased by 4.9% to R1.1 billion due to a stronger rand to the pound.

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