Clothing retailer The Foschini Group (TFG) has seen a decline in its online sales business, as customers return to brick-and-mortar shops.
This emerged when the retail group yesterday announced financial results for the six months ended 30 September.
With 31 retail brands under its ownership, trading in fashion, jewellery, accessories, sporting apparel, cellular, homeware and furniture, TFG is among SA’s largest retail groups.
Its brands include Archive, Duesouth, Exact, Fabiani, Foschini, @home, Markham, Relay Jeans, Sportscene, The FIX and Totalsports.
The dip in the company’s e-commerce business comes as its peers are recording bumper profits in online sales since the onset of the COVID-19 pandemic.
According to a recent report by consultancy firm Deloitte, there was an uptick in online shopping due to the COVID-19 lockdown in 2020, in South Africa and across the world.
It says COVID-19 challenged and shifted many of the barriers consumers have had to online shopping.
While TFG reported solid performance during the period, with group retail turnover growth of 31% compared to Q2 2022, the same cannot be said about online shopping.
According to the retailer, group online retail turnover contracted 6.9%, as consumers returned to stores during Q2 2023.
It notes online retail turnover contributed 8.1%, down from 11.4% during the same period last year.
For the year ended March, TFG reported robust achievement in the period, evidenced by the surge of retail unit turnover, with online sales contributing immensely.
At the time, TFG said online retail turnover grew by 11.7% to R4.4 billion, contributing 10.2% to total group retail turnover.
Nonetheless, while the group’s online business has shrunk, TGF Africa’s online retail turnover for Q2 FY2023 grew by 18.7% compared to the same quarter last year.
Online retail turnover contributed 3% to total TFG Africa retail turnover for Q2 FY2023 (Q2 FY2022: 3.1%).
The company adds that in line with expectation and the increased footfall in stores, online retail turnover from TFG London’s own sites contracted 16.2% in Q2 FY2023 compared to the same quarter in FY2022, while retail turnover from third-party online channels also declined by 4.1%.
In total, the contribution of TFG London’s online retail turnover for the quarter was at 36.6% (Q2 FY2022: 43%).
In Australia, the firm says online retail turnover for Q2 FY2023 was down 25.9% compared to the same quarter in FY2022, contributing 6.5% to total TFG Australia retail turnover for the quarter (Q2 FY2022: 17.8%) as previously locked-down shoppers returned to stores.
The drop in online retail comes after the company last year introduced TFGLabs, a new division with a mandate to attract the continent’s best tech talent, as the local fashion retailer invests significantly in technical capabilities to accelerate its digital strategy.
Meanwhile, the company says it lost 99 000 trading hours during Q2 FY2023 and 132 000 trading hours during the first half of FY2023 due to continued load-shedding across all provinces in South Africa.
It notes this represents 4.5 times and 2.6 times the lost trading hours over the same periods in the previous financial year, respectively.
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